Trade War Leads To New Challenges For Oklahoma Pecan Producers
Oklahoma’s pecan producers expect the largest crop yield in years. But trade tensions with China, the largest buyer of U.S. pecans, could make exporting the product difficult. Journal Record editor Russell Ray discusses the industry’s challenges in Oklahoma and how growers are attempting to reach the domestic market amid foreign tariffs.
Drew Hutchinson: You’re listening to the Business Intelligence Report, a weekly conversation about business news in Oklahoma. I’m Drew Hutchinson, and joining me is Russell Ray, editor of the Journal Record. Hi, Russell.
Russell Ray: Hi, Drew. Thanks for having me.
Hutchinson: So today, I’d like to talk about international trade issues and how they’re impacting Oklahoma’s agriculture industry. Specifically, I’d like to talk about your reporter Brian Brus’s article about the state’s pecan crop. He wrote that the pecan yield could be the largest in years. But this comes at a time when producers are less optimistic about exports given the trade tension with China, which is the primary importer of American pecans. Russell, could you give us a little primer on the state’s pecan industry?
Ray: Well, Oklahoma produces about 5% of the country’s total pecan production each year. And so that amounts to about 12 million pounds and is worth about $20 million, according to the U.S. Department of Agriculture. By comparison, the state’s winter wheat crop is worth about $460 million.
Hutchinson: And according to your reporter’s article, a month ago, China hiked up the tax on U.S. pecans to 47 percent. That’s pretty steep. And China has already been seeking out an alternative source.
Ray: That’s right. China has found a new source of pecans and that is Mexico, which has a much lower tariff at around 7 percent. Mexico’s pecan exports to China are up 3,000% compared with 2018. Now, the state’s pecan producers are anxious for a resolution to the trade war with China. The hope is that the industry will be able to find some alternative buyers to offset the loss in sales to China.
Hutchinson: Right. Now, according to the article, the global demand for pecans is still high. But producers are now trying to tap into the domesticmarket, and that’s these “alternative buyers” we’ve been mentioning. In fact, Brian Brus wrote in an earlier story that pecan producers nationwide have undertaken a new marketing push in an attempt to curb the effects of the ongoing issues with China.
Ray: That’s right. In the marketing campaign, pecans are billed as “America’s Original Supernut.” Producers tell us the new branding is badly needed to combat the stereotype that pecans are only for holiday pies and pastries. The hope is that the “supernut” campaign will protect the industry from any fallout resulting from trade tensions with China.
Hutchinson: Right.And this campaign isn’t new. It’s been in the works for about three years. But as pecan producers realized last year, it takes on new significance now, because the market could be shifting.
Ray: Well that’s right. If the industry is able to increase the domestic consumption of home-grown pecans, it could mitigate the impact of the tariff on pecan exports to China.
Hutchinson: Russell Ray is editor of The Journal Record. Thank you so much for your time today, Russell.
Ray: My pleasure, Drew. Thank you.
Hutchinson: KGOU and The Journal Record collaborate each week on the Business Intelligence Report. You can follow us both on social media. We're on Facebook, Instagram and Twitter: @journalrecord and @KGOUnews. You'll find links to the stories we discussed during this episode at JournalRecord.com. And this conversation, along with previous episodes of the Business Intelligence Report, are available on our website, KGOU.org. While you're there, you can check out other features and podcasts produced by KGOU and our StateImpact reporting team. For KGOU and the Business Intelligence Report, I'm Drew Hutchinson.
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