Published on 12/01/04

Retailers charging more for nuts

By Sharon Omahen
University of Georgia

Consumers are paying more for pecans this year. But Georgia farmers aren't profiting from the higher retail prices.

Pecan retailers, who sell to consumers, often buy pecans on contract from shellers. These contract prices were set months to even a year ago, said Wojciech Florkowski, an agricultural economist with the University of Georgia College of Agricultural and Environmental Sciences.

Retailers have control

"Once the contract is signed," he said, "retailers are in control of what they charge."

Pecan prices this year have risen as high as $8 per pound for retail shelled pecans, he said.

Tropical storms this fall battered Georgia's pecan crop, knocking limbs and nuts to the ground before they were ready for harvesting. Farmers lost 30 percent to 50 percent of this year's crop. They're expected to harvest about 40 million pounds.

"The retailers know there's a short supply of the crop and they are taking advantage of it," Florkowski said.

Farmers are getting higher prices for their pecans this year, he said. But the rules of supply and demand are working against farmers in this case.

Few farmers seeing a profit

"If prices are high," he said, "it's because growers don't have anything to sell because the supply is down."

But the lucky few farmers who weren't hit hard by the storms are making money. "It's hit and miss and very spotty," he said.

When the retail prices rise like they have this season, he said, pecan farmers begin to worry about consumer loyalty.

"Growers and shellers don't like this because it discourages consumers from buying pecans," he said. "They may turn to other nuts as replacements. Consumers may change their preference and view pecans as too expensive."

But in the heart of the holiday baking season, some home bakers remain loyal to pecans.

"I hate that they are more expensive, but I don't care," said Ruth Jarret of Griffin, Ga. "I'll pay the extra because they are worth it."

Sharon Omahen is a news editor with the University of Georgia College of Agricultural and Environmental Sciences.