UGA Pecan Extension

Scab and the Cost of Pecan Production in 2018

If nothing else, 2018 has been a wet year. As far as nut scab is concerned, the frequency of rainfall really starts to matter in June and its importance continues on through the rest of the season until shell hardening occurs (or shortly after shell hardening if you grow a scab susceptible variety). During years in which we get frequent rains, we have to spray—a lot in some cases—to control scab. This quickly cuts into profit potential.

A quick check of the UGA Weather station in Albany shows 9 days of significant rainfall (0.1″ or more) in June, 11 days in July, and 13 days in August. Often the rain fell in successive days or with no more than 2 or 3 days between. But even on those days when we didn’t get a significant rainfall event, most areas got some light rain, often late in the evening which would keep the nuts wet all night. Conditions like this make the battle with scab a nightmare for certain varieties, causing most growers to end up spraying at least 14-16 times to have any hope of keeping scab susceptible nuts clean.

We have had a good crop load this year on many varieties, most notably Stuart. Desirable had a heavy drop in most areas. Scab control overall was pretty good considering the pressure we were under but even if growers are doing all they can to keep it at bay, scab often wins the war in this situation. And that is the case this year. I have seen more scab out there as I travel around the state than I have seen since perhaps 2003, one of the wettest years we have encountered. Without question, scab is going to take a fair amount of the Desirable crop.

Surprisingly, we are also seeing more scab on Stuart than we have seen before. In fact, I have talked to a number of growers all over the state who have both Desirable and Stuart in the same orchard and are seeing more scab on Stuart than Desirable under the same spray program. This is very concerning and Dr. Tim Brenneman is currently working to try to get a handle on what is going on there.

All of this brings to mind the elephant in the room. The trade issues with China understandably make a lot of growers nervous because it really makes you think about how much money you have invested in this crop and most growers have had to put much more into it than they had hoped. So, just how much does it cost to grow this crop?

At 2015 variable production costs, we were looking at $1628 per acre to grow pecans with 16 sprays. That puts the break even price for a yield of 1000 lbs per acre at around $1.63/lb and you would still have to subtract your assessments from that. Since chemical costs have gone up slightly, I think its safe to say the variable cost this year for 16 sprays is up to $1800/acre, which makes $1.80 the break even price at 1000 lbs/acre. None of this considers fixed prices in the equation. If a grower still has land and equipment to pay for, even $1.80/lb won’t cut it.

Based on USDA statistics, the average price obtained by Georgia pecan growers across all varieties from 2015-2017 was $2.35/lb. Yes, pecan prices for growers have been profitable in recent years but not lavishly so. For years before the China market took off, I heard shellers saying they needed growers to plant more acreage to increase the supply and with the new marketing order in place to help develop the domestic market, the increased acreage will be a necessity for a consistent supply. But, it has only been recently with the improved prices that growers have been able to afford the considerable cost ($2200/acre) of planting more orchards to increase pecan acreage. At the same time, the entire industry has grown, thrived, united, and garnered more attention than it ever has. If we go back to $1.50 per lb nuts, it won’t be long until we are right back in the same boat we were in 12-15 years ago, if not worse off.

We all know that in the face of the current trade situation with China, we will likely see lower prices this year than we have been seeing. Everyone I have talked to says China wants the nuts, we just have to figure out how to get the pecans to them. In addition we have heard presentations in various meetings over the last couple of years that domestic consumption is on the rise. So, demand for pecans is out there.

When prices fluctuate from one extreme to another, its impossible for an industry to thrive. I don’t know what things are like on the sheller/buyer side of the pecan industry but I do know that with the current cost of production, we can’t grow quality pecans for much less than $2.00/lb and survive.

To be certain, this will be a year in which the quality of your crop will bring the best price possible.

 

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Lenny Wells

About Lenny Wells

I am an Associate Professor and Extension Horticulture Specialist for pecans at the University of Georgia. My research and extension programs focus on practical cultural management strategies that help to enhance the economic and environmental sustainability of pecan production in Georgia.