No Pecan Pie? Thank China, Rain and Pigs

November 27, 2013

No Pecan Pie? Thank China, Rain and Pigs


OCILLA, Ga. — It is a meager holiday in the pecan groves of the South, and the pain is stretching to kitchens across the country. A rare collision of ill-timed rain, marauding animals and a growing love affair between the Chinese middle class and the pecan has resulted in the worst pecan supply in recent memory. As a result, grocery store prices are up by about 30 percent, which is causing Thanksgiving bakers to think twice about their menus.“It’s like the world doesn’t want us to make pralines,” said Anna Butler, 24, a Texas native who lives on the Lower East Side of Manhattan.

Ms. Butler has a ticket home to Texas for the holiday, so she and her New York friends celebrated an early Thanksgiving last weekend. She had planned to show off her Texan roots with a black-bottom pecan pie. But at her favorite Manhattan market, a pound of shelled pecans cost $15.99.

“That’s a real investment in a pie right there,” she said.

Too much, in fact. She brought a dish of cauliflower, macaroni and cheese instead.

In 2012, the nation’s pecan orchards produced about 302 million pounds of pecans. This year, that number could drop by as much as 35 percent, according to industry officials. In Georgia, the nation’s leading pecan-producing state, the crop is expected to be about half of what it was last year. In South Carolina, some orchards succumbed completely.

The problem began with record rainfall last spring and summer. Pollination became difficult, and the moisture encouraged disease. Pecan growers sprayed their fields in record amounts, but it was not enough to fight off a disease called scab.

In Texas and Oklahoma, it was a summer drought that hurt the trees. Then came autumn’s heavy rain, which made the ground too wet to hold the heavy equipment that shakes nuts from trees and sweeps them up.

As a result, harvesting was sporadic, and the pecan supply was left wide open for feral pigs, which have become quite a problem in Texas, and for squirrels, which are always looking for a free nut.

“The crop faced a lot of wildlife pressure,” said Blair Krebs, associate director of sales and marketing at the Texas Pecan Growers Association.

The bad nut crop has a few other causes, one of which is the cyclical nature of pecans: Typically, if one year is good, the next year is not.

Last year, for example, Texas produced about 65 million pounds of pecans, said Larry Stein, a professor of horticulture at Texas A&M University. Most estimates indicate that this year will bring no more than 35 million pounds.

Then there is China.

In the mid-2000s, the market for pecans in China began to grow rapidly. China now consumes more than a third of the American pecan crop, a development that followed the country’s inclusion in the World Trade Organization in 2001.

“Before that, they didn’t know what a pecan was,” said Randy Hudson, the owner of Hudson Pecan Company here in Ocilla and a vice president of the National Pecan Growers Council.

With about 1,500 acres, Mr. Hudson’s company is the largest pecan operation in Georgia. More than 90 percent of his crop goes to China, which makes him one pecan farmer who is not unhappy this Thanksgiving.

“You raised the price I get by 600 percent?” he said. “You are my best friend.”

In street stalls and grocery stores in Beijing, seasoned American pecans in the shell — called “bi gen guo” because “bi gen” is supposed to sound similar to “pecan” — were recently selling for $7.45 a pound.

Chinese shoppers prefer big varieties with thin shells, with names like Desirables and Stuarts.

“The ones that are real pretty on top of a pecan pie? Most of those have gone to export,” Ms. Krebs said.

Chinese processors lightly crack the shells, send the nuts through a bath of flavored water and dry roast them. The most popular flavor is called cream. Mr. Hudson says it tastes like vanilla.

They are sold by the bagful and are particularly popular around the Chinese New Year, which is coming in January — earlier than last year, and soon enough to elbow out the Thanksgiving nut supply.

While that isn’t good news for American bakers, it has alleviated the pain for many farmers. Although the crop is small this year, the price is well over $3 a pound at the wholesale level.

Still, that has not helped the neighborhood pickers in the Deep South who collect “yard nuts” from the pecan trees that grow in backyards from Atlanta to rural Texas.

In a fall ritual, people scoop them up and bring sacks to shelling stands along the road. In many rural regions, “We buy pecans” signs are not hard to find. Gathering yard nuts in Alabama with an eccentric cousin at the start of fruitcake weather was a soul-saving exercise for a young Truman Capote, who wrote about it in his short story “A Christmas Memory.”

But backyard pecan trees and small orchards are not usually sprayed regularly enough to ward off disease.

“People use yard nuts to pay their property taxes,” said Scott Hudson, Mr. Hudson’s son and vice president of the family company. “But not this year.”

The great pecan crisis of 2013 is playing out differently in different regions. Parts of New Mexico might have a good crop of high-quality nuts. And some parts of the country just do not care as much about making a pecan pie for Thanksgiving.

Nationally, there were more than twice as many searches for pumpkin pie as for pecan pie, a Google spokeswoman said.

An analysis of data from Google showed that pumpkin was the most searched-for pie variety in states including Alaska, Maine, Montana and South Dakota. People in Vermont were most likely to search for apple pie.

But in the South, where pecan pie had the most searches, bakers were on edge.

Stacey Eames will produce more than 200 pies for Thanksgiving at the Highland Bakery in Atlanta. She is from Albany, Ga., which is in the middle of 60 miles of the most fertile pecan orchards in the world.

Like many Southern children, she grew up crunching across pecans on her way to school and learned early how to crack them open by taking two in one hand and applying pressure.

The cost of ingredients for Ms. Eames’s Thanksgiving pecan pies has soared, but she has to keep her prices in line with those of big bakers like Whole Foods and Publix supermarkets. And she can’t skimp on the nuts.

“There’s only so much you can charge for your pie and still be competitive,” she said. “But these pies need to look like, ‘Wow, that’s a pie.’ So you just have to eat that difference.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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