Uneasy about price prospects for the 2009 pecan crop and concerned about input costs, Dick Eastman, president of Lesco Enterprises, Bowie, Ariz., may lower his production sights for this year.
“Last season was rough for Southwestern pecan growers,” he says. “Prices for the off-year crop were much worse than we anticipated and everyone is squeamish about the price for this year’s crop. Plus, our input costs were so blasted high last year. Unlike previous years, we may not be trying to maximize production in 2009.”
Eastman has been growing pecans, mostly Western and Wichita, for the past 22 years. He farms about 600 acres of producing trees and another 400 acres of younger trees.
Although his input costs are down from the extremely high levels of last year, they are still above the past few years. For example, four years ago, he paid about $235 per ton for phosphorus in the form of phosphoric acid. The price soared to $1,300 a ton last year, before dropping to current levels of $625 per ton, he reports. Last year, he chose to forego his application of phosphorus and potassium due to high costs.
This year, Eastman will put on lower rates of both nutrients. Because he applied enough of these fertilizers in the past, he notes, his trees shouldn’t suffer from these temporary cutbacks. “We don’t like to mine everything out of the soil,” he says.
In 2008, the price of UAN 32 hit about $630 per ton, Eastman reports. The cost is now $300 a ton. That compares to its price of $210 to $250 several years ago. “The price has come down enough that we may be able to apply full rates of nitrogen this year,” he explains.
Meanwhile, the cost of irrigating his orchards, which represents about 30 percent of his total input costs, have shot up nearly 40 percent so far this year. The main reason is the higher cost of electricity.
Last year he was paying about 7.2 cents per KW/hour for electricity. Currently, he’s paying 11.4 cents for the same amount. “Our electricity prices haven’t increased in a number of years and I expect them to continue going up,” he says. “We’ll have to watch what we use. We’re not limited by supplies of water. I am limited by how deep my pockets are.”