Hurricane Helene Slashes U.S. Pecan Crop, Mexico Loses Top Spot, South Africa & China Race to Fill a $ 1 Billion Supply Gap!
1. Latest Market Updates & News
The May round-table at the International Nut & Dried Fruit Council (INC) in Palma delivered a blunt message: pecans are officially in short supply while world appetite is climbing fast. The headline numbers are sobering:
- Global in-shell output is forecast to slip 4 % year-on-year to 288,934 t in 2025/26, the first contraction since 2020.
- Kernel availability will fall slightly faster, down 5–6 % to 144,986 t, because shell-out ratios are lower in heat-stressed groves.
- Total marketable supplies (carry-in + new crop) are projected to shrink to 355,458 t in-shell (≈178,000 t kernel), a level the trade regards as “just-in-time” rather than comfortable.
Behind the numbers sit four headline stories:
- Hurricane Helene’s legacy in the United States – Older orchards in Georgia, Alabama and the Florida Panhandle lost large limbs or entire trees when Helene roared through in September 2024. The USDA now pegs the coming U.S. crop 6 % smaller at roughly 115,000 t in-shell (57,500 t kernel).
- Water scarcity in Mexico – Drilling bans and soaring electricity tariffs have frozen new plantings for half a decade. Output is expected to plunge 13–17 % to about 110,000 t in-shell, knocking Mexico off the world-leader pedestal and handing top-producer status back to the United States.
- A seven-per-cent jump in South African tonnage – Adroit irrigation management and rising bearing acreage lift South Africa to a record 40,000 t, providing China with crucial counter-seasonal supply during May-to-September.
- China’s domestic orchard boom – Although volumes remain modest (≈8,500 t), production is more than doubling as provinces from Yunnan to Hunan push tree-nut diversification programmes.
2. Global Production Status & Key Origins
United States – Hurricane-pruned trees, labour inflation and rising interest costs are the watch-words. Growers warn that abandoned blocks foster hickory shuck-worm and pecan nut case-bearer, forcing adjacent farms to increase spray frequency. Harvest will begin in southern Georgia in late September, peak in Texas in October, and wrap up in the desert West by mid-December.
Mexico – The Chihuahua and Coahuila valleys count on aquifer pumping; electricity hikes and drilling moratoria have stalled new orchards. Limited investment plus a two-year drought cycle will keep quality uneven, with smaller nut counts anticipated (55–58 nuts / lb rather than the 48–52 premium buyers prefer).
South Africa – Hot, dry summers and low disease pressure yield plump, light-coloured kernels. Mechanical shaking of Western Schley, Choctaw and Wichita starts in late May and runs until September, dovetailing perfectly with Chinese autumn festivals.
Emerging origins – Brazil (southern Rio Grande do Sul), Argentina (Entre Ríos), Australia (river Murray irrigation) and China (sub-tropical hill-sides) are all scaling up. Although each country still accounts for single-digit global share, double- or triple-digit growth rates underline future export potential.
3. Dollar Prices Now & Near-Term Trend
While firm, May spot values are highly origin-specific:
- U.S. Desirable 55/59 in-shell, FAS Gulf ports were quoted by handlers at US $ 3.25–3.45 per lb (≈US $ 7.20–7.60 kg kernel-basis) for July/August vessel space.
- Mexican Western Schley 58/62 Chihuahua border offers stood at a 10–12 cents/lb discount to comparable U.S. grades, reflecting slightly weaker meat-to-shell ratios.
- South-African extra-large in-shell (46–48 nuts/lb), CIF Shanghai traded at US $ 3.80–3.90 lb in early May, buoyed by yuan strength and record freight demand before the Mid-Autumn build-up.
Traders expect prices to edge another 5–8 % higher through Q3 2025 because:
- Pre-holiday Chinese buying normally accelerates in July–August.
- European snack brands, encouraged by a 10 % year-on-year rise in German consumer awareness, are scheduling bigger Q4 promotions.
- Kernel converters in the Middle East are already short; Ramadhan 2026 falls earlier (late-February), so they will book raw material before Christmas.
4. Market Analysis & Signals
- Tight pipeline – Pecans differ from almonds or walnuts: there is no strategic buffer. Whatever is harvested is usually consumed inside twelve months. The projected 18-month supply hole signals sustained firmness.
- Tariff whiplash – China’s 10 % duty on U.S. nuts (versus 125 % until the Geneva truce) runs out in mid-August unless a permanent agreement is ratified. South-African and Mexican shippers are courting Chinese roasters as a long-term hedge.
- Cost inflation – Pecans have the highest cost-of-production per acre among mainstream tree nuts because trees take 10–12 years to mature and yields never match almonds. Rising borrowing rates and fertiliser bills leave little room for origin discounts.
5. Quality, Harvest Timing & Crop Characteristics
- United States – Desirable, Stuart and Pawnee from irrigated groves will offer 50 %+ kernel recovery, golden meats and thin shells. Non-irrigated lots could show darker testa and more brittleness.
- Mexico – Longer drying windows can produce slightly leathery shells; expect medium-amber meats unless irrigated late.
- South Africa – Light-to-golden kernel colour is the norm; growers practise rapid post-shake drying to <4 % moisture, suiting China’s snack segment.
- Harvest windows:
- U.S. Gulf & Southeast: late-Sept to mid-Nov
- U.S. Southwest deserts: Oct–Dec
- Mexico: Oct–Dec
- South Africa: May–Sept
- Brazil/Argentina: April–July
- Australia: April–June
- China: Sept–Oct
6. Tariff Landscape
- U.S.–China – 90-day truce cuts duties to 10 % on nuts entering China, 30 % on Chinese goods into the U.S. If talks collapse, tariffs can snap back overnight.
- U.S.–Mexico–Canada Agreement (USMCA) – Keeps North-American pecan flows duty-free.
- EU MFN rate – Still 0 % for in-shell pecans; kernels attract 2 %, but CETA gives Canada duty-free access and similar concessions for U.S. product remain under discussion.
- South Africa to China – 0 % under the Preferential Trade Agreement, a key driver of its export boom.
7. Strategic Recommendations
For international buyers
- Book early: Kernel converters that wait until Q4 risk paying peak-season premiums or facing allocation limits.
- Diversify origin mix: Combine U.S. Desirable for confectionery gloss with South-African Western Schley for snacking crunch.
- Monitor tariff headlines daily; a negative turn in U.S.–China talks could trigger panic demand for non-U.S. origins.
For growers & exporters
- Highlight sustainability: Pecans’ lower water footprint per edible-kernel kilo (vs. almonds) is a marketing edge in eco-sensitive EU retail.
- Upgrade sizing & colour sorting to meet emerging EU snack specs (golden, FANCY grade).
- Educate new markets – Germany’s consumer awareness jumped from 60 % to 70 % in two years; branded snack packs could boost off-season demand.
8. Future Outlook (2026–2028)
- Bearing acreage in the U.S. southeast is still expanding, but hurricane risk and urban-sprawl land prices slow net growth.
- Mexico must solve irrigation politics or cede further share to South Africa and Brazil.
- China will remain a structural importer despite its orchard boom—per-capita snacking demand is rising faster than domestic supply.
- Artificial-intelligence sorting and precision-irrigation adoption could raise long-term kernel yield per acre by 5–7 %, but the payoff is years away.
Additional & Complementary Updates (Not Covered Above)
- Argentina is lobbying for a bilateral phytosanitary protocol with China, hoping to ship its first container lot of high-oil-content pecans to Shanghai by Q4 2025.
- Brazil’s southern co-ops report farm-gate prices climbed 18 % in local currency after the INC forecast, reflecting speculative buying from European traders seeking off-season kernel.
- U.S. shipping logistics remain tight: Houston Freeport cold-store vacancy ran below 8 % in April, meaning late-season U.S. exporters may face extra drayage charges to secondary ports.
- European consumer trend: A 2024 survey by Innova shows pecans now feature in 12 % of new chocolate launches, up from 7 % in 2021, signalling robust ingredient demand.
- Currency watch: The Mexican peso hit a 20-month high versus the U.S. dollar in mid-May; if the rally continues, CIF Rotterdam offers for Mexican kernels could climb another 3–4 cents per pound purely on FX.
FAQ Section
1. Why are pecan prices expected to rise in 2025?
A 4 % drop in world output—driven by U.S. hurricane damage and Mexico’s water shortages—cuts marketable stocks just as Chinese and European snack demand accelerates, pushing prices higher.
2. Which countries will dominate pecan production this season?
The United States regains first place at roughly 115,000 t in-shell, while South Africa climbs to 40,000 t, overtaking drought-hit Mexico, whose crop slips near 110,000 t.
3. How does the new U.S.–China tariff truce affect pecan trade?
For 90 days, Chinese import duty on U.S. pecans drops from 125 % to 10 %, reviving short-term buying; exporters warn that uncertainty after mid-August could reignite volatility.
4. What are current farm-gate and wholesale pecan prices?
Mid-May 2025 quotes:
- U.S. Desirable 55 % in-shell – $ 3.15 /lb FAS Savannah
- Mexican Western Schley – $ 2.80 /lb FOB Ciudad Juárez
- South African Choice 58 % – $ 3,350 /mt CFR Qingdao
5. When is the 2025 pecan harvest and how will quality look?
Northern Hemisphere harvesting starts in September, but hurricane-felled trees and heat stress mean smaller kernel counts. Southern Africa’s crop, harvested May–September, reports clean shells and high oil content.
6. Which emerging markets are boosting pecan demand?
China now absorbs 90 %+ of South African exports, Germany’s retail awareness jumped to 70 %, and Middle-East bakers are trialling pecan-filled maamoul, broadening global consumption.
7. How can buyers secure supply during the forecast shortfall?
Contract early for Q4-Q1 needs, diversify origins (U.S., South Africa, Brazil), and hedge with option spreads; analysts expect inventories to stay “hand-to-mouth” for the next 18 months.
8. Are there any substitutes if pecan prices climb too high?
Roasted walnuts and macadamias are the closest functional substitutes, but their own tight stocks and tariff risks mean only limited cost relief—formulators should test blends now.
