ATLANTA -- Georgia's pecan-farming business has been clobbered this year, and the problems aren't over for one of the state's biggest crops.
Pecan prices have plummeted by at least a third for Georgia farmers. Much of the state's crop, once the largest in the nation, is in the mud, or worse. And some of the trouble will last years for a branch of farming that already demanded patience. It can take 15 years for a pecan tree to turn a real profit for growers.
The hardships are the result of a triple whammy: awful weather, Chinese retaliatory tariffs and a spike in competition from Mexico.
Consumers, though, are expected to remain mostly immune from the pain.
Thanks to the globally connected nut market and an array of middlemen, prices and supplies at Georgia grocery stores haven't shown a blip, according to the Georgia Pecan Growers Association.
It's the organization's farmer members -- and potentially their suppliers, workers and lenders -- who are suffering. Some growers are scrounging on the ground to salvage every nut they can. Others don't bother, given how low prices are.
"It makes you want to cry," said Richard Grebel, who farms and manages 2,000 acres in South Georgia.
Devastation from Hurricane Michael was bad enough for various Georgia crops.
But the October storm wiped out half or more of the state's pecan harvest, which had been on pace for a bigger-than-average haul, said Lenny Wells, a pecan specialist and University of Georgia horticulture professor. Direct losses for pecans are expected to reach $560 million. That includes likely losses for next year's crop and damage to trees. Pecan farms are primarily in the southern half of the state, with harvests valued at nearly $400 million last year.
Grebel said he's down 2.5 million pounds of pecans. That loss alone was probably worth $4 million at the market's current low prices, he said. In addition, many of his trees were twisted and mangled, ruining growth needed to produce nuts next year and beyond.
Michael's winds also ripped the roof off his cold storage building and cut into other business. Grebel said that instead of putting 5 million pounds of nuts through his cleaning plant, including nuts from others' farms, he got only 100,000 pounds.
"One of the things that scares me is that we are not going to come back next year at all," he said. " I know next year we are not going to make any money to speak of."
Grebel said crop insurance will help. And various state and federal assistance is expected to soften the blow. But farmers say it won't make up for all the losses.
Part of the problem is that farmers faced more than a hurricane, said Chad Walker, a pecan farmer from Ashburn, Ga.
"The hurricane put everything we had on the ground," he said. Then weeks of rain made it hard to quickly salvage the fallen nuts. Pecan quality suffered, which further eroded prices.
Georgia pecan farmers had braced for a low payout this year after China increased tariffs on U.S. pecans and other products in response to a trade dispute with President Donald Trump.
Georgia growers typically send 60 percent of their crop to China, which offers high prices per pound just in time for the Chinese new year. (Christmas and Thanksgiving are other big draws for Georgia pecan farmers.) The tariffs have virtually eliminated that trade with China, at least for now.
Then came an unexpected surge of lower-priced pecan production out of Mexico during the heart of Georgia's harvest season. The cumulative result was that Georgia pecan farmers were left with low supplies and low prices, and the damage to pecan trees will cut into future crops and finances for years to come.
That's on top of lingering troubles from 2017, when remnants of Hurricane Irma cut into harvests and damaged many of Georgia's pecan trees.
"It's very stressful," said Danny Levie, who estimated he lost 40 percent of his crop this year alone.
A fifth-generation pecan farmer in Montezuma, Ga., Levie's trees include some planted by ancestors in 1918. He usually sells online as well as to grocers, bakeries and caterers. But the bulk of his harvests went to China until the tariffs hit.
"I haven't sold a single nut to China this year," he said.
He predicted it will take up to eight years to get his damaged trees back to full production.
A lot can change in agriculture markets in that time. A reduced U.S. walnut crop a decade ago helped spur Chinese buyers to turn to Georgia pecans and boost the industry, according to Wells.
Now, with Chinese tariffs and competition from Mexico, the prices available to Georgia pecan farmers "are not really sustainable long term," Wells said. "They can't grow the way they have been growing it for the prices they are getting now."
But having other options may help. In recent years, U.S. farmers have built up markets for their pecans in Vietnam, South Korea and Turkey.
Business on 12/25/2018