A Brief History of Pecans
Pecans are an increasingly popular food item, not just in the US, but around the world. They are part of a global trend of accelerating tree nut demand, as consumers look for plant-based sources of protein and healthier options for snack foods.
Although the pecan market has developed more slowly over the last several decades in comparison to the almond market, pistachio market, and other tree nuts, it has experienced considerable growth over the past decade with both global consumption and production growing at over a 5% CAGR from 2015-2019.
Given pecans' unique mix of health benefits and their classic buttery flavor, their popularity worldwide is likely here to stay. Below, we’ll explore some key trends in pecans’ production and marketing to showcase why land planted in pecan orchards represents such a compelling opportunity for farmland investors.
Pecans Are The Only Tree Nut Native To North America
Although many of the world’s most significant tree nuts are grown in the US today, pecans are the only tree nut crop with ecological origins in the modern-day US. The vast majority of commercially grown pecan varieties are cultivars of the species Carya illinoinensis, a large tree that can grow up to 40m in height. Carya trees are part of the same family as walnut trees, and many other species in the Carya genus are known more commonly as Hickories.
Pecans were an important food item in the cultures of a range of Native American tribes. Their name is derived from the Algonquian word ‘pakani’ and many indigenous tribes in North America were known to consume foraged pecans, even using them as currency in trade among some tribes. Native Americans also created the world’s first nut milk, a fermented pecan beverage called “powcohicora” that had prevalence in various tribes’ histories and cuisines.
The first Europeans to come into contact with pecans were Spanish settlers in Louisiana and Texas in the 16th century. However, the nuts were rarely used as a commercial product until the late 18th century when they began to gain popularity in the newly-independent United States. Though not yet prevalent in everyday diets, wild pecans were widely known to the founding fathers’ generation - in fact, Thomas Jefferson reportedly grew pecan trees at his Monticello estate in Virginia, and George Washington wrote in his journal that he at one point received what he referred to as “Illinois nuts” from Jefferson along with seedlings, which he later planted at his own home in Mount Vernon.
It wasn’t until a century later, however, that modern-day pecan production finally began to take shape with a variety known as “centennial”, which was named in honor of the US’ 100th anniversary as a nation. This variety is the first recorded pecan variety to have been successfully propagated in a nursery setting, as well as to be used in grafting and orchard development. From this point forward, pecan production on farms began to spread throughout the country.
Pecans are now grown commercially in at least fifteen US states.
Today, pecans’ native roots and their ties to Native American tribes are still extremely strong, as evidenced by the names of many popular commercial varieties. Some of the most widely-grown varieties in the US include Sioux, Pawnee, Cheyenne, Choctaw, Mohawk, and Shawnee.
Modernizing Pecan Production
The development of varieties that could be used in an orchard setting marked a major turning point for pecans’ significance as a crop. Since the late 1800’s, pecan orchards have been planted across much of the American South and West, as well as in northern Mexico. Within the US, Texas, New Mexico and Georgia grow the most pecans of all states, followed closely by Oklahoma.
For most of their history as a commercial crop, pecans’ production was dominated by what people in the industry still refer to today as “native” varieties. Broadly, these varieties are generally defined as cultivars of the trees originally found to occur naturally across pecans’ present-day bearing range. Native pecans have an immensely diverse gene pool, with over one thousand varieties. They also have many natural defenses against pests, diseases, and physical crop stressors, such as droughts or extreme weather. These traits allow native pecan trees to have a productive lifespan often as long as 60-70 years, and to continue living for dozens or even hundreds of years beyond their fruit-bearing age.
More recently, modern-day breeding and orchard development techniques have led to the advent of “improved” pecan varieties, which are becoming increasingly popular among today’s commercial growers. These varieties get their name from crop geneticists who have selected and bred them for specific favorable traits, such as to improve flavor, maximize yield, or adapt them to specific growing environments. Two of these varieties’ more agronomically significant attributes is their ability to be planted in much higher-densities, and to work well with disease-resistant rootstock. This, along with their thinner shells and higher kernel-to-fruit ratio by weight, can mean that well-managed orchards planted in improved varieties can be incredibly productive.
Although more input-intensive and high-maintenance than native trees, the flavor profiles and ease of post-harvest processing associated with these improved varieties lend to a more favorable price compared to native pecans. USDA data have shown that improved pecan prices have outperformed those of native pecans consistently since 2010. This trend will likely continue as the development of these varieties advances; in fact, it has already contributed to increased popularity among growers, as well as momentum behind breeding and agronomy research in the pecan industry. Organizations like the Noble Foundation, based in the key growing region of southern Oklahoma and Texas, are leading the way in researching and commercializing improvements to pecan production in both indigenous and managed orchard systems.
Pecans Today: A Healthy “Super Nut” Showing Strong Global Demand
Though the US occupies more than a 50% share of global pecan consumption, worldwide consumer interest in pecans is quickly gaining ground on other popular snack nuts. Perhaps the strongest driver of this demand is pecans’ unique mix of nutritional benefits. These nuts contain at least 19 vitamins and minerals, as well as a high concentration of antioxidants and monounsaturated fatty acids known to reduce the risk of heart disease and several cancers.
Demand for pecans is growing especially strongly in Europe and around the Mediterranean, as well as in a variety of other countries, to include Israel, South Africa and Australia. Between 2015 and 2019, total consumption of pecans in Israel, the Netherlands, and Germany nearly doubled, with the rest of the EU not far behind. This trend, combined with steadily strong demand within the US, Canada and Mexico, puts the US pecan industry in an advantageous position - zero-tariff trade relationships with these leading consuming nations means that US pecans carry a lot of value in both domestic and international markets.
In fact, international pecan demand has grown so substantially in recent years that the US (already a substantial importer of pecans as of the beginning of the 21st century) has had to increase its imports of pecans by nearly twofold over the last 10 years in order to balance domestic supply against increasing export demand for its own harvests.
Given pecans’ excellent nutritional qualities, diverse culinary uses, and growing global popularity, the world is just at the beginning of a surge in pecans’ significance as a crop and commodity. The momentum in the pecan market, as well as in research driving improvements in pecan production, make this nut an excellent choice for any farmland investor.
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Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.