Sell or hold at harvest?

If you’re growing pecans and you don’t need the money from your crop right away at harvest, holding in cold storage to cash in on possibly higher prices later in the marketing year can pay off.

At least that’s been the experience of Kyle Brookshier, Brookshier Pecan Farm, Van Horn, Texas, who first tried this approach with his 2002 crop.

It will cost to store pecans until the market reaches a level where a grower believes he is maximizing his profits. In Brookshier’s area, for example, monthly cold storage costs are 1.1 cents per pound. Such costs, of course, must be figured in your decision.

“If you are willing and able to withstand the financial risks, the rewards can be there,” he says. “Depending upon market conditions, you can make as much as 10 cents to 20 cents more per pound above cold storage costs. Of course, if conditions aren’t right, prices can go the other way. One year I lost money, compared to selling my crop at harvest; one or two years, I made a little money — but, more often, I’ve made quite a bit of money doing this.”

Brookshier points out that transferring pecans from field to freezer within a week of harvest preserves quality of the nuts better than storing them in an open barn.

When deciding whether to sell at harvest or go into cold storage then, he usually follows a simple strategy: Hold pecans only when going into an off-year. “The best time to sell is not when there is a glut on the market,” he says.

Typically, Brookshier waits until shellers have an idea of the size of the current-year crop, usually in the spring or summer, before he begins selling. Depending on supply and demand factors, he may then sell all his pecans at one time. In other years, he’ll sell throughout the marketing year.

“I’ve also had some success when I held pecans going into an on year,” Brookshier says. “For example, in 2007, a sheller didn’t buy enough pecans when the off-year 2006 crop was harvested to fill his contracts, because he thought the prices at harvest were too high. Later, in 2007, he was willing to pay more to meet his need.”

He offers this advice when considering holding your pecans for a better price.

1. Use accurate market information when making your sell/hold decision. Brookshier relies on USDA information concerning carry-in from the previous crop year and the size of the current crop. He also studies the various grower group crop projections throughout the year.

2. Seek the market expectations of a knowledgeable sheller or broker. “Find one that you can trust to tell you what they really think about what the crop size currently is, what it was and what it’s likely to be, and well as the demand situation,” he says. “This information can help you confirm or re-assess your thinking so that you can have more confidence in your marketing decision.”

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