Production and Supply Simultaneously Tightening
Global in-shell pecan production is expected to decline by 4% in the 2025/26 crop season, with kernel production decreasing by 6%. Supply is simultaneously shrinking—in-shell supply is projected to drop from 37,384 tons in the previous season to 35,550 tons, a 5% decline; kernel supply will decrease from 18,940 tons to 17,820 tons, down 6%. The pecan industry has traditionally operated with low inventory, and procurement professionals are advised to take swift action within the next 18 months.
Production Reduction Primarily from Two Major Producing Countries
United States: Approximately 25% of production areas were permanently destroyed by the September 2024 Hurricane Helen, impacting old trees, with an expected 6% production reduction
Mexico: Due to years without expansion, water resource shortages, and high production costs, in-shell/kernel production will sharply drop by 14% and 17% respectively, losing its status as the largest producer and yielding to the United States
Emerging Production Areas Showing Contrary Growth
South Africa's production is expected to increase by 7% to 40,000 tons
China and Brazil will achieve triple-digit growth; although China is actively expanding cultivation, domestic production still cannot meet rapidly expanding demand
High-Cost Dilemma
The INC conference noted that pecans have significantly higher production costs compared to walnuts and almonds due to low yield and long tree growth periods. Current trade friction, coupled with inflation and interest rate pressures, further escalates planting costs.
Tariff Impact and Market Restructuring
Although less impactful than other nut categories, China's tariffs on US pecans have prompted buyers to shift to origins like South Africa and Mexico. While recent US-China negotiations temporarily reduced punitive tariffs to 35% and 10% respectively (valid for 90 days), market direction depends more on negotiations and final trade agreements. Analysts believe industry trust will take years to rebuild, even with a friendly agreement.
Emerging Consumer Forces
85% of global pecan consumption is concentrated in the United States, Mexico, and China. With China's continuous snack innovations and increasing consumer awareness, pecans have enormous global promotion potential.