Dan Zedan, nationally known industry expert, nut broker and owner of Nature’s Finest Foods, says pecans—especially pieces or smaller halves—are a “very competitive” alternative to almonds due to the ongoing drought in California.
“Due to severe drought conditions, California almond growers have had a significant water problem this year resulting in stress to the trees and impacting nut size and yield,” Zedan says.
Many producers were able to buy water from the government, but that additional expense pushes up wholesale and retail costs. “Unless California receives significant amounts of rain and snow this winter, the water problem could be even worse next year when producers might begin losing trees,” Zedan says.
While he still expects a significant yield of almonds, around 2.1 billion pounds (kernel basis), lack of water has resulted in a dearth of large almonds, pushing prices for large nuts well past $4 a pound. Standard unsized almonds, which are mostly used for diced nuts or marzipan, are selling between $3.45 and $3.55 per pound (wholesale pricing), making pecans “very favorably priced” when compared to almonds, a popular ingredient in many manufactured goods.
Based on estimates by the Tri-State Pecan Growers Association, U.S. growers are projected to produce 256 million pounds (in-shell basis) of nuts in 2014. The Texas Pecan Growers Association put the number at 264 million pounds. Last week the USDA reported that the 2013 crop was 266.33 million pounds (in-shell basis).
“Assuming these numbers are correct, pecan prices should not change dramatically in the months ahead thereby keeping pecans very competitive with almonds, pistachios and walnuts,” says Zedan. “Further, due to increased domestic consumption over the past two years, the price of pieces should firm going into the fall holiday season with the price differential between halves and pieces continuing to decline.”
Pecan halves are currently selling for $5.40 to $5.90 a pound while pieces are priced at $4.25 to $4.40 a pound (wholesale level).
Grown in 15 states in the U.S., pecans are less prone to weather-related price swings than almonds or pistachios, which are primarily grown in California, and don’t incur the high transport costs of nuts such as cashews, which are grown in the tropics.
According to the Center for Pecan Innovation, gluten-free pecans are high in monounsaturated (good) fat, protein, antioxidants and many hard-to-get vitamins such as B12 and E. Naturally sodium-free, pecans are a smart alternative for manufacturers looking to develop new products or create more healthful or gluten-free brand extensions. To learn more about manufacturing with pecans, visit americasnut.com.