FARE Blog

Food, Agriculture, and Resource Economics

China’s Tariff Impact on Georgia Pecan Industry

By Dr. Esendugue Greg Fonsah

The U.S. and Chinese Trade War will have a negative impact on the Georgia pecan industry if not resolved.  The United States produces 80% of the world’s pecans and Georgia remains the number one producer of pecans with a record 50-70% exported to China for almost a decade (Hargreaves, 2013). The high demand for pecans has also triggered a market distortion from the traditional distribution channel (grower-processor-consumer) to direct marketing and sales.  An additional 15% tariff on nuts and fruits will create a major impact to the Georgia pecan industry as it will increase the cost of pecans, thus reducing the quantity exported to China. That would in turn increase domestic quantities since the bulk of Georgia pecans that were destined to China will be floating in the domestic market.  So far, China remains the main market for U.S. pecans although a small quantity goes to India, South Korea, Turkey and Vietnam (Andrew, 2017).   Although the U.S. might successfully look for alternative markets, it will be difficult for these new/emerging markets to absorb the large volume of stock created by the possible reduction in export to China.  With the large pecan production and acreage expansion currently going on, the domestic market might be flooded and eventually dampen prices.

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