US traders eye return to Chinese market

NEW YORK — Pecan growers, processors and traders in the United States have expressed their eagerness to return to the Chinese market after struggling with declining prices, thin profit margins, rising input costs and overseas market setbacks in recent years.

Major players in the industry stressed the need to reduce tariffs between the US and China to reopen access to the Chinese market, once the leading export destination of US pecans.

Industry insiders said low wholesale prices and higher input costs have largely squeezed the profitability of upstream businesses recently.

Last year, US pecan growers received an average sales price of $1.68 per pound, down from $1.8 in 2022 and $2.16 in 2021, according to the US Department of Agriculture.

The US pecan industry used to earn higher prices before China imposed tariffs in 2018 in response to additional US tariffs targeting imports from China, said Will Easterlin, co-owner of Easterlin Pecan in the US state of Georgia.

Easterlin said his company shipped about 200 containers of pecans to China in recent years, much fewer than the 600 to 900 containers shipped annually before the trade conflict.

Currently, the pecan price is about $2 to $2.5 per pound, with little profit margin, said Brad Ellis, co-president of Ellis Bros Pecans. Production expenses have also increased because of higher costs of fuel, labor and chemicals.

Inflation is "killing us on the production side because the price of fuel and labor is making it where it's not profitable for the farmer to stay in business", Ellis said.

Randy Hudson, CEO of Hudson Pecan and former president of the US Pecan Growers Council, said, "Growing pecans and selling pecans in the US right now is a losing proposition."

Hurricane Helene recently dealt a severe blow to Georgia's pecan farmers, with about one-third of growers in the state affected, said Mary Mikelyn Bruorton, executive director of the Georgia Pecan Growers Association.

Preliminary data showed the hurricane affected about 19,000 hectares of pecan orchards and destroyed about 400,000 pecan trees, Bruorton said.

Hudson, whose orchards are mainly located near Ocilla in Irwin County, said he lost 30 to 40 percent of his trees to the storm.

Although efforts are underway to save as many trees as possible, "it'll take 10 years before we start harvesting enough nuts" to cover the maintenance costs of raising a tree, Hudson said.

Given the scale and readiness of the Chinese market, US pecan business insiders are calling for a return to it to overcome current difficulties.

"China has always been a really good friend to the US pecan producers, and we would really like to open those channels up back to China," Hudson said.

Chinese tariffs posed significant challenges to US pecan exports, putting them at a disadvantage globally, he said. "Personally, I am not fond of tariffs. Because quite honestly, the tariff is passed back to the consumer with higher priced goods."

The tariffs were introduced during former president Donald Trump's administration, effectively halting US pecan shipments to China, he said. " (President Joe) Biden had the opportunity to work with China and remove those tariffs through bargaining processes. And it was not done."

Ellis, who manages 1,200 hectares of pecan orchards, said he hoped the tariff dispute would be resolved.

"We would like to see relationships with China go back to a level where we can easily trade US agricultural products to China because they have a big consumer base."

Xinhua