Events last year conspired to hit western pecan growers with a perfect storm — a small off-year crop, a substantial drop in prices for their product, and input costs that reached historic highs.
Richard Heerema, Extension pecan specialist at New Mexico State University, recounted the rise in input costs at the Western Pacific Pecan Growers Association’s annual conference at Las Cruces.
“2008 was the most expensive season in history for growing pecans,” he told the 300 or so conference participants.
Among the rising costs:
Labor: Several factors, including tighter immigration control and, in some areas, more attractive oilfield wages, have driven farm labor costs to about $9.50 per hour plus 25 percent to 35 percent overhead.
Diesel fuel: Pecan growers typically use 15 to 20 gallons of diesel per acre. Last year’s average diesel price of $4.35 per gallon was 60 percent higher than the year before and double the 2003 price.
Irrigation water: To supply the 5 to 6-acre-feet of water needed to grow pecans, most western growers pump at least part of their water from wells. The annual cost of pumping 5.5 acre-feet of irrigation water from a well less than 100 feet deep was estimated at about $400 per acre for a diesel pump, $190 per acre for a natural gas pump, and $130 per acre for an electric pump
Fertilizer: Material costs of nitrogen, phosphorus, and potassium ranged from $140 to $325 per acre. That was a 90 percent increase over 2007 and 160 percent higher than 2003. The material cost of zinc and other micronutrients totaled at least $50 per acre last year — a 30 percent increase from the previous year and 75 percent more than five years earlier.
Pest management: Last year, pecan growers spent about $100 per acre in material costs to control pecan aphids. Some spent another $25 per acre in material costs to control other pests, like the pecan nut casebearer and the hickory shuckworm. Material costs of cleaning the orchard floor and five applications of glyphosate to control weeds totaled about $200 per acre. That was two to three times higher than in 2007.
Total production costs: Using middle-of-the-road figures, variable production costs last year totaled about $1,800. Growers in New Mexico’s Mesilla Valley spent about $2,500 on both variable and fixed costs.
So far, 2009 input costs are down from last year. Heerema notes that nitrogen and diesel prices have dropped pretty substantially.