Federal Pecan Marketing Order aims to stabilize market
In 2015, I wrote about the proposed Federal Marketing Order (FMO) for pecans. On May 6, 2016, the U.S. Department of Agriculture announced that the order passed by an overwhelming majority of pecan growers in the 15-state producing area.
So what does this mean for the U.S. pecan industry and you as a grower? The FMO will assist the industry by promoting and marketing pecans to increase demand; therefore, it will help stabilize pricing and hopefully increase the prices growers receive for their pecans. The FMO will be used to gather and publish accurate industry data such as cold storage inventory, crop yields and estimates, and total supply of pecans, which will improve the industry's ability to price pecans. Standards for grade, quality and size will be established by the FMO along with standards for packaging pecans. The FMO will also help facilitate coordination and investment in pecan research both on the production side and on product development.
The administrative body for the FMO will be the American Pecan Council, which will consist of three growers and two shellers from each of the three production regions and two at-large seats including one accumulator and one public member. The three regions are defined as Eastern (Alabama, Florida, Georgia, North Carolina and South Carolina), Central (Arkansas, Kansas, Louisiana, Mississippi, Missouri, Oklahoma and Texas) and Western (Arizona, California and New Mexico).
Assessments will be collected on the 2016 crop and will be 2 cents per in-shell pound on native, seedling and substandard pecans and 3 cents per in-shell pound on improved pecans. The assessment will be paid by the first handler. The growers will not pay for the assessment on pecans sold to an accumulator or to a sheller. The only way a grower will be responsible for the assessment is if he or she is selling pecans directly to consumers. In this scenario, the grower would be the first handler, so he or she would have to pay the assessment on the pecans that are directly sold.
Through this period of change, it is important to keep in mind that marketing orders are initiated by industries to help provide stable markets for crops. Producers can benefit through promotion and marketing and the finance of research that is critical to the improvement of any segment of agricultural production. If you have questions about the FMO and the assessment, please contact the American Pecan Board.