Las Cruces, N.M., pecan grower Phil Arnold and other Mesilla Valley producers recently got a little drought-relief — from .5 to 1.5 inches of much-needed rain fell on their orchards in mid-May.
The rain was welcome because Arnold expects to receive only enough surface water from the local district to irrigate his trees twice this season.
Typically, growers irrigate 11 to 13 times per season. “Many years ago, we irrigated less frequently, but we applied a lot more water each time,” he says. “But, we’ve found that letting trees stand in water for days on end can cut off oxygen to the roots. And we have to be as efficient as possible with our water.”
Despite the dry conditions, valley orchards are in good shape and appear to be putting on an above average crop for an off year, Arnold says.
The USDA will release its projection for this year’s crop in September. Currently, sales are very limited, but he recently heard of some inshell pecans selling for close to $4 a meat point (meat point price X percent kernel yield = price per pound). That compares to inshell prices of around $4.25 per point in early March, $4.70 to $4.85 per point mid-January, and $5 to $5.25 per point mid-December. The decline was in reaction to historically high $6 per point prices for new crop Southeast pecans offered for the Chinese market early last fall, Arnold says. That put a damper on demand. Meanwhile, some New Mexico growers are holding 2011 pecans in cold storage, hoping to sell later at higher prices.
“The pendulum is swinging back,” he says. “Those record high prices may have been due to a frenzy to get pecans to China for the New Year. In addition, there were worries about severe weather problems that devastated production in Texas and Oklahoma. Ultimately, the high prices in the Southeast caused a drop Chinese consumption. That, and an increasing resistance to record high prices by U.S consumers, helped soften the inshell market.
“I don’t foresee sky high prices for this year’s crop like last year; I think there will be a correction. Prices won’t completely fall out of bed, because China, the big driver in the market, is still there. Even though prices will probably be lower, they are still likely to be at a profitable level.”
Early-season reports indicate pecan supplies from this year’s North American crop will be about the same as last year. For example, one observer projects Mexico’s production at about 170 million pounds. That’s only 10 million pounds more than last year, Arnold notes. Meanwhile, other sources are estimating that U.S. growers will harvest 275 million to 300 million pounds this year, compared to last year’s 280 million pounds. He expects the 2012 crop will total just below 280 million pounds.
“Right now, with nut drop still to come, it will be a couple of weeks until we know what is set on the trees,” he says. “We’ll start fine-tuning the numbers in late summer and early fall.”
An early spring and adequate rainfall in the Southeast have led some to predict the earliest Georgia crop ever, which would encourage more shipments to China, Arnold says.
The Chinese will mark the start of their new year, the Year of the Snake, Feb. 10, 2013. That would provide U.S. sellers an extra two weeks more than this year to supply pecans for the festivities celebrating the most important of traditional Chinese holidays.