Unified U.S. pecan industry eyes export expansion

Unified U.S. pecan industry eyes export expansion

James Ditmore is among the pitchmen across the U.S. pecan belt working to open doors to expand pecan exports to more countries worldwide. While the U.S. pecan industry has cracked the China export market, Ditmore is broadening international marketing efforts for pecans. US Pecans, the new export arm of the National Pecan Growers Council (NPGC), will generically market pecans from all U.S. pecan-producing states.

James Ditmore is among the pitchmen across the U.S. pecan belt working to open doors to expand exports to more countries worldwide.

Ditmore is an international trade specialist with the New Mexico Department of Agriculture (NMDA). Ditmore and others are focused on adding the pecan to the world’s buffet of nut offerings which currently includes U.S. walnuts, almonds, and other nuts.

Ditmore discussed current and future pecan marketing activities during the Western Pecan Growers Association Conference in Las Cruces, N.M. in March. More than 600-plus growers and other industry members attended the 45thannual event.

A marketing effort which placed New Mexico pecans on the worldwide map began almost a decade ago, thanks to Ditmore’s marketing vision. In 2006, the first major shipments of New Mexico inshell pecans were sold to China. Before then, the pecan was an unknown nut to the Chinese people.

“The word ‘pecan’ was not in the Chinese language,” Ditmore said. “We labeled the pecan as the ‘long life’ nut. The Chinese referred to it as an exotic nut.”

In the U.S., the history of the pecan can be traced back to the 16th century. Pecan is a Native American word of Algonquin origin used to describe "all nuts requiring a stone to crack.” 

Today, inshell New Mexico pecans sold to China and then soaked in brine once in the country sell for about $6.50 to $7 per pound (U.S. dollars). Fancy packaging includes gold-colored fancy emblems plus the photo of a Chinese movie star.

New Mexico shelled pecan exports have steadily increased to China. More recently, China has purchased shelled pecans (meats). The largest market is southern China - targeting Shanghai and Hong Kong with its 25 million-plus residents.

While the U.S. pecan industry has cracked the China market, Ditmore is sensitive to putting “all the eggs in one basket.” He is broadening international marketing efforts for pecans.

“China could close their doors tomorrow to pecans,” Ditmore explained. “We want to develop new markets to incorporate pecans in the global diet.”

Pecan marketing is underway in the Middle East and northern Africa. Ditmore, growers, shellers, and others have marketed pecans at numerous international food trade shows, including recent events in March in New Delhi, India, plus Dubai in the United Arab Emirates.

“India could prove to be a lucrative market and Dubai has tremendous potential,” Ditmore said.

About 95 percent of India’s population is vegetarian. Pecans can help achieve the protein requirements in the vegetarian diet.

Export goal

“Our export goal is to position pecans as the premium nut,” Ditmore said. “We will introduce the pecan in India as the royal American cousin to the walnut.”

India is very conservative and developing this new market will take time. The key, Ditmore says, is learning the culture and how current nut varieties are utilized in the diet. Other countries targeted for U.S. pecan exports include South Korea, Thailand, Vietnam, and others.

Expanding U.S. farm exports comes with a litany of challenges including market development funding, trade barriers, embargoes, high tariffs, and diplomatic issues. The current tariff in India is about 50 percent; about 36 percent in China. Some countries lack a “cold chain” - facilities to keep food cold. Refrigeration helps maintain the quality and taste of pecans.

“The real goal is to become the globally-preferred nut over walnuts, almonds, hazel nuts, and hickory nuts,” Ditmore said.

In the past, leaders in U.S. pecan-producing states marketed their own state’s pecans hoping to gain a foothold worldwide for their respective industries. This began to change earlier this year with the formation of US Pecans, the new export arm of the National Pecan Growers Council (NPGC). The idea is the generic promotion of U.S. pecans from all pecan-producing states.

“There is consensus within the U.S. pecan industry for this national organization to advance pecan marketing and access related research dollars,” NPGC President Phillip Arnold told the crowd.

This merger of efforts opens the door to more potential export funding from the USDA’s Foreign Agricultural Service (FAS). The FAS funding requirement mandates generic promotion; marketing U.S. pecans as a whole versus state-specific pecan promotion by Georgia, New Mexico, Oklahoma, Texas, Arizona, and the other pecan-producing states.

Arnold and Ditmore said US Pecans has qualified for $350,000 in FSA funds for 2011; $200,000 from the agency’s market access program and $125,000 from its emerging markets program. US Pecans has successfully raised the required matching contribution to receive the FSA funds, and is poised to request additional funding in 2012.

“I have been in the pecan industry for 28 years and I am more enthusiastic than ever before,” Arnold said. “I see more interest within each segment of the industry wanting to come together for the common benefit of everyone. We are creating a demand for pecans worldwide which will benefit everyone. We need to expand world markets for profitability in the U.S. pecan industry.”

Initial discussions by lawmakers on the 2012 farm bill have included some red flags, including potential cuts in MAP program funding due to federal budget cuts which could jeopardize the future promotion of pecans and other commodities.

“MAP funding (for pecans) is there for 2012 but as the new farm bill approaches future funding is a concern,” Arnold said. He hopes future funding will remain intact since the Obama administration has pledged a commitment to increase U.S. exports by 100 percent over the next five years.

Increased pecan production is necessary to provide the pecans needed for expanded worldwide demand, Arnold says. New pecan plantings are underway across the U.S. and in Mexico.

“There are many juvenile orchards,” Arnold said. “The pecan supply will increase dramatically in the next 10 to 15 years.” 

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