PECAN: THE PROFIT NUT

The nation’s troubled farm communities, struggling with foreclosures, surplus production and foreign competition, have held little appeal for those looking to relocate home or business.

Yet, Randy Sadler greeted news of his job transfer to the agricultural heart of the San Joaquin Valley with a great deal of enthusiasm. Sadler and his wife, Doris, have long been anxious to leave the congestion of Los Angeles and return to something decidedly rural and slow-paced.

Having received their wish, the couple set out to find a home and several acres of land “with lots of trees” somewhere near this farming center, about 40 miles south of Fresno. The two finally decided upon a ranch-style house complete with 10 adjacent acres of orchard.

Now, 18 months later, the Sadlers realize that they had inadvertently purchased a small piece of what may be one of the nation’s most profitable crops: California pecans.

The income from the nuts is not enough for Sadler to forsake his job with a local utility company, but it’s an awfully nice accident.

“I think we really stumbled onto something,” Doris Sadler said. “They are very pretty trees and make such a pleasant surrounding. And that we can make some money from them is an added bonus.”

The Sadlers’ good fortune is attributable mostly to luck. But others here have been quietly hailing the arrival of pecans--particularly as demand for this state’s walnuts and almonds have softened. In fact, California pecans seem to exemplify what happens when all the pieces finally come together in agriculture.

Brian Blain is a pioneer in this crop, which is still a somewhat foreign commodity to most Central Valley growers. His family has worked for more than a decade to make possible the income that the Sadlers and others are now enjoying.

Blain owns several hundred acres of pecan orchards in addition to California Nut Shellers, a company that processes and ships the amber, meaty nuts.

In the early 1970s, few of Blain’s farmer colleagues would say anything encouraging about locally cultivating a tree native to parts of the South and Texas.

“Fifteen years ago, all the old guys said to us, ‘You can’t grow pecans in California ‘cause the nut won’t fill out.’ At the time, there was a lot of stubbornness,” Blain said.

Not so anymore, as Blain’s trees are entering their peak production cycle after undergoing several years of dormant infancy and adolescence, in which few of the green-hulled kernels appeared.

“There are a lot of people around here today who want to buy pecan orchards, but there aren’t any available for sale,” he said. “Those that have groves are not interested in selling.”

What makes pecans so economically desirable is the fact that U.S. growers usually have difficulty producing enough to satisfy national demand, even though the nut is grown in 16 states.

The American appetite for pecans can reach as much as 300 million pounds annually, according to Norman Winter, executive director of the National Pecan Marketing Council in Bryan, Tex. However, estimates place 1986’s harvest at 226 million pounds, down about 16% from previous seasons’ average, Winter said.

At present, almost all pecans are diverted to industrial customers for use in baked goods, ice cream and confections, with a mere 10% of the total sold either roasted or in the shell as a snack food. This imbalance is perceived as an opportunity for growers to further increase demand and consumption by developing the out-of-hand market.

The pecan’s nutritional profile is another attribute that has yet to be exploited by the industry.

“The pecan is superior in taste to the almond or walnut,” said George Ray McEachern, extension horticulturist at Texas A&M; University, which has been in the forefront of pecan research. “Where the almond and walnut are hard in texture, the pecan is soft. The oil in pecans is fabulous at 98% unsaturated fat. It is low in cholesterol and is an extremely healthy energy food. And there is good marketing potential based on its quality, taste and health factors.”

California is still a minor player in a pecan industry dominated by Georgia and Texas. But Winter cites federal estimates that indicate that this state’s total harvest could rise to 11 million pounds by 1995, up from the present 3-million-pound level.

So, what looks like the right crop at the right time benefits from several factors that distinguish it from varieties grown elsewhere.

Possibly the most distinctive characteristic is the premium appearance and flavor, Blain said.

To illustrate the point, he randomly assembled a batch of pecans being processed at his plant recently. The nuts were remarkably uniform in color--all a light gold, with few blemishes evident. The California variety, being mechanically shelled and dried, also had a fresh, clean taste.

Flavor is often where differences among the various crops can be dramatic. McEachern said that some states have been known to produce a nut that tastes flat and dry. Other food critics have been less charitable and have stated that occasionally a sharpness, bordering on bitterness, is evident in pecans.

Blain agreed. “Sometimes farmers from other states are hard-pressed to even grow an edible nut.”

The disparity exists, in part, because the local crop benefits from a longer season, which allows the fruit to fully develop. Area growers also make a point of removing the pecans from the field at their peak, or as soon as the green hull, which encloses them, begins to crack. Others states will leave the pecans on the tree until the first frost--a point at which deterioration has already been set in motion.

The end result of the extra promptness of harvesting led one agricultural trade magazine to call the California pecan “the finest quality nut in the world.”

Texas A&M;’s McEachern said the desirable attributes of the California nut are also found in those pecans grown anywhere from central Texas to points west, including operations in New Mexico and Arizona. However, McEachern did not totally dismiss California chauvinism and said there can be significant quality differences from one area to the next.

Differences arise because there are hundreds of pecan varieties, and some states still rely on those trees that are native to the area and grow wild. Crops from these sources, or varieties closely cloned from them, can present some quality or yield problems.

The desirable characteristics of the local variety are enhanced by the fact that mature, San Joaquin Valley pecan trees can yield as much as 500% more than trees in other parts of the country. Currently, Blain’s average harvest reaches as high as 2,500 pounds of nuts per acre versus only 500 pounds in, say, Louisiana.

The recent market has also been good for the Californians. Prices paid to growers during the recently completed harvest were between 90 cents and $1 a pound. Other states’ growers have received prices as low as 50 cents a pound, particularly for those pecans harvested from uncultivated, or wild, trees.

“Some California kiwi growers have a higher return on their investment, but their costs of growing are higher than ours,” Blain said. “Our return per acre can be as high as some of the vegetable crops such as broccoli and cauliflower. . . . There are not too many crops that give a 10% to 15% return annually on investment. The only problem is the long wait (five to seven years) for a return.”

At $1 a pound, Blain receives as much as $2,500 per acre of pecans. He estimates that his costs to care for, and then harvest, each acre run about $1,000, a figure which does not count the price of land. So, a $1,500-per-acre profit would certainly put pecans among an elite group of crops in terms of revenues.

Local growers have also discovered that pecans are relatively hardy. A tight, hard shell makes the pecan meat virtually impregnable to insects, disease and mold problems faced by farmers in parts of Texas and the Southeast.

“In the South, there are insects that burrow through the shells and attack the nut, but we have some kind of barrier that has prevented their spread here,” Blain said.

Just as important is that for the foreseeable future the domestic pecan industry will have little foreign competition. The same cannot be said for the other major nut crops in California. This state’s growers have to compete with extensive almond operations in Spain, walnut orchards in France and pistachio groves in Iran and Turkey.

The international production void for California pecans will be short-lived, though. Mexico is developing a strong industry that, within five years, may rival the harvest of Texas and Georgia combined. However, the Mexicans may be content with shipping their pecan crop to international markets other than the United States, according to Winter of the marketing council.

For now, California pecan growers, like Blain, have the market just where they want it. But there is a growing fear that the good times may not last.

“The worst thing that could happen to us would be for someone like Getty Oil to plant 20,000 acres of pecan trees somewhere in the Central Valley,” Blain said. “That would eventually have a negative impact on everybody by creating an oversupply that would drive prices downward.”

Doris Sadler agreed with Blain, saying that other growers, disappointed with returns on commodities such as walnuts or citrus, may turn to pecans. Such a move would hurt those fortunate enough to be in production now.

That fear, however, is not keeping the Sadlers from making their own modest expansion.

“We hope to plant more trees in a bare area near the house,” Doris Sadler said. “And we are planning to replace some walnut trees we have in the orchard with pecans. . . . They’re an exclusive sort of thing and you find out that you have a lot of friends when you have an exclusive crop.”