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Growth Potential

Posted Nov. 9, 2011

Pecan production offers new opportunities to agricultural producers
  • Photos
  • Pecan Fast Facts
  • The Pecan tree is native to North America.
  • George Washington and Thomas Jefferson both grew pecan trees.
  • More than 1,000 unique varieties of pecans exist.
  • The United States produced 302 million pounds of pecans in 2009, representing about 75 percent of the global market.
  • China imported less than 1 percent of the U.S. pecan crop in 2005, but imported more than 25 percent in 2009.
  • Georgia ranks fist in pecan production with 80 million pounds, followed by Texas (70 million pounds), New Mexico (55 million pounds) and Oklahoma (20 million pounds).
  • Oklahoma has 140,000 acres dedicated to pecans, making it the second largest in pecan acreage in the U.S.
  • Oklahoma is the fastest growing state in new orchard establishment and has been for the last five years.
  • Oklahoma only harvests one-third of its 140,000 acres of pecan trees, and the state's producers only manage a quarter of what is harvested. If producers managed all the trees that were harvested, the state could increase production 400 percent, equaling 80 million pounds.
  • "Improved" pecan varieties are those that have been bred specifically to enhance production.
  • Pecan is an alternate bearing nut, which means it has a high production year followed by a low production year.

The health benefits of pecans
According to the National Pecan Shellers Association, pecans contain more than 19 vitamins and minerals, including vitamin A, vitamin E, folic acid, calcium, magnesium, phosphorus, potassium, several B vitamins and zinc. Some sources have labeled pecans "unhealthy" due to their fat content; however, the majority of this fat is unsaturated, which may have a positive impact on health. Researchers at Loma Linda University conducted a diet study that found consuming a diet enriched with pecans lowered both total cholesterol and LDL cholesterol levels. Studies have also shown that pecans can delay the decline in motor neuron function that often occurs during the aging process.

  • Meet Charles Rohla: Noble's pecan expert

Charles Rohla was born and raised in Chester, Okla. Rohla received a bachelor's degree in animal science (1998), a master's degree in agricultural education (2002) and a doctoral degree in crop science (2006) from Oklahoma State University (OSU). While working toward his doctorate, Rohla worked at OSU's Fruit and Nut Research Station at Perkins, Okla., as a research technician for five years focusing on peaches and pecans. He was drawn to the production and profit potential of pecans. He studied under Mike Smith, Ph.D., during his doctoral program and time at the Fruit and Nut Research Station. Smith is considered one of the leading pecan experts in the United States. Currently Rohla serves as president of Oklahoma Pecan Growers. He also sits on the Advisory Council for the National Pecan Growers Association and the Advisory Board for U.S. Pecans, a United States Department of Agriculture initiative to export pecans to expanding international markets, specifically China.

If you tell Tim Montz that money doesn't grow on trees, he is likely to chuckle, then take you to his backyard. Arranged in a militarily precise grid are 8,000 pecan trees, Montz's sole source of income, his literal forest of financial freedom. Based out of Charlie, Texas, in the Red River Valley, Montz is one of the United States" premier pecan growers with 25,000 trees on 1,100 acres that produce more than a million pounds annually. At an average of about $2.20 a pound (and increasing), Montz knows what many others are just figuring out: pecans are more than just pie filling.

"There is a lot of money to be made in pecans," said the 57-year-old. "I was putting money into a retirement fund, but now this is my retirement. Of course, it's not as easy as planting a few trees." Fully funding the golden years through pecans is not possible for most agricultural producers, but bolstering annual income even for landowners with small acreages is an increasingly attractive option.

"Farmers and ranchers are using pecans as a way to diversify their operations," said Charles Rohla, Noble Research Institute assistant professor and one of the nation's leading authorities on pecans. "The downside is the up-front investment and slow return; it may take a decade to see any profit. Of course, depending on management and marketing strategies, farmers and ranchers can earn from $200 to $3,500 an acre."

Potential profit and skyrocketing demand from markets with insatiable appetites have not gone unnoticed. More and more, farmers and ranchers are planting orchards, hoping to grow a brighter financial future. In support of the pecan growers, Rohla builds on more than 30 years of pecan research tradition at the Noble Research Institute, studying ways to maximize the wonder nut's production and developing more effective management strategies.

"The biggest myth with pecans is that they are only a holiday treat. That's just not true." Rohla said. "Soon everybody will be thinking about pecans year-round, especially agricultural producers."

More for Montz
For Montz, the investment in pecans began with a cane pole. In 1978, Montz was a struggling cow-calf producer who harvested native pecan groves that grew on land he leased for cattle. He'd whack pecan tree limbs with a cane pole, harvest the pecans by hand and sell them for a little extra Christmas money. The profits led to further investment. In three years, Montz purchased a harvester, shaker and cleaner, and opened a small store in Byers, Texas.

In 1986, two events coincided to push Montz deeper into the pecan business. He inherited 35 acres of land, which was too small for wheat or cattle, and he met Hal Berdoll at a Texas Pecan Growers Association meeting. Berdoll had moved beyond simply harvesting native trees and was planting his own orchard filled with "improved" varieties that produced more pounds per tree and more profits. "I thought if he could plant pecan trees, I can do it," Montz said. Of course, there was one problem: Montz didn't know how to plant pecan trees.

A friend introduced him to the Noble Research Institute, where consultants taught him the fundamentals. "I probably killed more trees than most people have planted, especially in the beginning," Montz said. "I was lost, and the Noble Research Institute was there to provide answers." Despite local naysayers, Montz planted 1,000 trees between 1986 and 1987, and continued purchasing land around his homestead just for pecans. "People thought I was crazy," he said. "They said I'd never make any money because they thought it took 100 years to get a full crop."

By 1994, Montz had 8,000 trees planted, but continued his cattle and wheat operation, spreading his resources and himself too thin. "One day a friend of mine said, "You'd be a lot better off if you just concentrated on one thing," Montz explained. "I instantly knew he was right, so I turned the leases back and focused strictly on pecans."

Montz added another 17,000 trees over the next decade and a half. He has endured pests, disease, deer, squirrels and even a tornado that blew away 500 trees. "I had to make this successful or I'd go broke. People who plant pecan orchards go broke all the time," Montz said. "You have to look at pecans like a crop. You don't just plant a tree and come back in 10 years. You help establish it. You provide it water and nutrients. You manage it for pests and disease. It's hard work."

During peak harvest, the operation can harvest up to 60,000 pounds of pecans a day, keeping Montz and the next generation very busy. Montz's son, Jake, manages the day-to-day operations and seven full-time employees. His daughter, Jill, operates a 10,000-square-foot retail shop in Wichita Falls that sells about 100,000 pounds of pecans each year.

Today, Montz's operation is fully integrated from the orchard, to cleaning and shelling, to consumers worldwide. The bulk of Montz's pecans are sold to wholesalers across the United States, Canada and Germany with enough orders to exhaust his supply each year. Montz, who is president of the Texas Pecan Growers Association, has traveled around the world to cultivate exploding international markets like Shanghai, China, where the Texas group was overrun with eager buyers.

Five years ago, China imported relatively few pecans, but a walnut shortage sent the country searching for a new nut. They found pecans with a preferable flavor and health benefits (see sidebar, page 24).

Today China gobbles up more than 25 percent of the total annual United States export, paying almost $6 a pound according to The Wall Street Journal. "I see the pecan market only getting better and better," said Montz, smiling. "We can"t grow them fast enough. That's not a bad place to be."

Looking toward the future
On the Oklahoma side of the Red River, downstream a few hundred miles from Montz, is a pecan operation just putting down roots.

Chester Bench spent 30 years building his industrial crane business while dabbling in agriculture. When he sold out in 2000, Bench and his wife, Susan, bought a little slice of retirement heaven near Hugo, Okla. Except they didn't retire.

The Benches spent three years building fence, clearing brush and operating a small cattle business. Much like Montz 30 years before, Bench realized his land and the surrounding properties were filled with unmanaged, native pecan trees. He wanted more information, and a friend referred him to the Noble Research Institute. Soon a caravan of agricultural consultants arrived to review his operation and, specifically, examine the possibilities of pecans. "It was like the cavalry had arrived," Bench said. "They jumped right out and got to work taking soil and leaf samples."

The Noble Research Institute consultants helped the Benches manage their 700 native trees and form a cooperative with the surrounding landowners to harvest another 1,500. The couple, who now employ four workers, manage seven native orchards while still running a 350-head cow-calf operation.

In 2006, Rohla joined the Noble Research Institute and one of his first stops was the Benches' operation. Together, they set goals to build upon the couple's success with native trees and plant 7,000 improved pecan trees in five years. Looking out from the Benches' back porch into the lush green valley below, the young pecan trees about 4,000 planted so far look like matchsticks on the horizon.

The Benches are on the opposite end of the production spectrum from Montz with their first real crop of improved pecans still a few years away, but the goal is the same benefit the next generation. "We could be fishing in the middle of Toledo Bend, but we chose not to do that. We have three children and five grandchildren, and, hopefully, this will help them in the future," Bench said. "We're doing this for them." Added Susan, who helped name their new business Legacy Pecan Company: "Ranchers try to leave a ranch to each child. We're trying to leave a pecan orchard to each child."

The math seems to justify the Benches' confidence. "It takes two acres to run a calf that will make about $800, while the same two acres could make up to $4,000 in pecans," Bench said. "We've ridden the stock market cycles up and down for decades, and the pecans are the better investment. If managed properly, they can be profitable for 75 years."

While pecans, not industrial cranes, are now his business, Bench's mind for marketing fueled a conversation about international consumers and new efforts to build a national coalition. The United States Department of Agriculture (USDA) recognizes the potential export market for pecans and initiated "U.S. Pecans," which is in its first year, to capitalize on the pecan boom. To be successful, the initiative will depend on the participation of producers who look at the broader potential of a joint effort producers like Bench. "We must be unified to move this forward," Bench said, leaning forward. "The U.S. produces 300 million pounds of pecans each year. That's good, but there is huge room for growth."

Rohla, who sits on the advisory board of U.S. Pecans and the National Pecan Growers Association, concurs: "Growing the industry is vital to its long-term success, but we have much work to be done in understanding the market and better utilizing the pecan itself." Using pecans better requires that we better understand them. Researchers are attempting to answer the more peculiar pecan problems, and Rohla knows cracking these issues will keep the pecan industry thriving.

Advancement through research
Research in pecans industry-wide and at the Noble Research Institute is as diverse as the 1,000-plus varieties. "There are a lot of variables to pecan research and many questions that need to be answered," Rohla explained. "If we can find the answer, we can increase production, improve land stewardship and provide a better product to the consumer."

Studies focus on establishment, including proper weed and vegetation control, and jumpstarting production, specifically looking at different methods of irrigation.

Currently two universities and various irrigation companies offer conflicting recommendations. Rohla has undertaken a study to compare all options from subsurface drip to aboveground sprinklers, measuring the total growth and production of trees. "When producers get their first full crop depends on management, especially irrigation," Rohla said. "Proper management and irrigation could cut that time down from 10 years to five years."

Another major issue for increasing pecan production is reducing "alternate bearing." Pecans naturally alternate between high and low production years. On high production years, the pecan quality is low and there is an abundance of nuts, deflating prices. On low production years, quality is better and the supply is limited, increasing prices.

Researchers, like Rohla, are trying to even out the high and low years, helping to stabilize the market. Mike Smith, Oklahoma State University horticulturist and Rohla's mentor, developed a technique called "green thinning," where producers thin the crop during high production years to remove potential growth and force the tree to reserve stock until the following year.

Rohla's research on alternate bearing looks at managing nutrients to assist with the green thinning process. Limiting nutrients during high production years naturally reduces the amount of nuts available and saves the producer input costs. "It's another step in addressing alternate bearing," Rohla said. "But we still have so far to go to truly manage this phenomenon."

Beyond investigating individual pecan problems, Rohla continues a 29-year-old Noble Research Institute study, examining the marriage of pecans specifically native production and livestock, the region's most prevalent agricultural enterprise.

Results have been consistently telling. Cattle grazing the pasture below the pecan trees decrease a producer's input costs because they are not using fuel to mow under the trees. Additionally, cattle return about 85 percent of nutrients back to the trees.

"The two systems work well together," Rohla said. "In every year we've studied, either the cattle will pay off or the pecans will pay off. And the years that they both pay off are particularly profitable."

While most pecan researchers are strictly that researchers Rohla maintains his connection to the producers through the Noble Research Institute's consultation program. The growers often generate some of the best research projects. "They are out in the orchards every day, dealing with the real issues," Rohla said. "We need to answer those questions that have the most impact."

Bench has asked several of those questions. He once queried Rohla about planting methods, comparing bare root versus trees begun in containers (a process not often used in Oklahoma). Rohla established a study to determine the best method as part of a 100-tree research station on the Bench property.

"While some researchers limit their work to high input, highly managed orchards, here at the Noble Research Institute, we also study issues affecting lower managed orchards or dry land orchards," Rohla said. "This work benefits many of the producers in our region and elsewhere. That's the future. We"re not there yet, but we're getting there."

As for Montz's future, well, that's sitting in a building behind his office a shiny new bass boat. "I'm still around to help make decisions, but I'm turning more over to Jake," said Montz, patting his son on the back. "I love what we've grown here, and I love that it will help provide for my children."