Texana
Tough Nuts to Crack
By a comfortable margin, Georgia—yes, Georgia—is now the nation’s top pecan-producing state. What are Texas growers doing to reclaim the lead? Not enough.
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Today, the Oliver Pecan Company is one of the state’s largest pecan accumulators. As a middleman between growers and shellers, Oliver pays 60 to 90 cents a pound for up to 12 million pounds of pecans a season, everything from grocery bags full of backyard pecans to trailer-truckloads weighing thousands of pounds. He even buys in several areas of the state to hedge against drought, the pecan nut casebearer, stink bugs, and other catastrophes.
Buying, however, is the easy part. To make a decent living in the pecan business, Oliver has had to diversify. A new division overseen by his son, Shawn, produces pecan honey butter for the lucrative gourmet food market. And, of course, Oliver has had to seek out the pecan-shelling operations that will give him the best price. Some are as far away as Georgia and the Carolinas, but since the cost of trucking the nuts across the country cuts into profits, he likes to stay closer to home. These days he has a choice of a dozen or so shellers scattered across Texas, including six large ones run by out-of-state conglomerates that recognize our strategic location at the buckle of the pecan belt, which stretches from the Carolinas to Southern California and down into Mexico.
“The more shellers the better,” Oliver says—yet some of his fellow San Sabans are nervous about the arrival of the out-of-staters. “Three or four big players are muscling in to buy up local companies,” a city father told me. “One of them is from California, and the other has got ties to the underworld.” The truth isn’t quite that juicy. Yes, several big operations have opened for business in Texas over the past few seasons. Yes, several are owned by out-of-staters. But there is no evidence of anything seamy. The rumors seem to have been driven by the Italian-sounding names of two of the owners: Jasper Sanfilippo, of the Chicago-based John B. Sanfilippo and Company, the new parent company of Sunshine Nut Company in Selma, Texas; and Sam DiGregorio, of Chicago’s SNA, which had a pecan operation in the El Paso area before going bankrupt and selling to Morven Partners of Virginia, which bought San Saba Pecan around the same time.
Rather than fretting over who owns these newcomers to the Texas market, one prominent pecan expert says, Texas growers ought to organize to give themselves some leverage. “As it is now,” he notes, “growers take the greatest risk, and they get the smallest percent of profit.” This expert believes they’re missing the opportunity to integrate their businesses vertically. “When these guys start selling kernels instead of pecans,” he says, “they’ll start making money.” In other words, when growers, in some kind of cooperative arrangement, start shelling their own pecans, they won’t have to take whatever price the big shellers deign to offer. If the small growers would go in together and buy one of the new, vastly improved cracking machines on the market, the pecan expert suggests, they would quickly recoup their investment.
Yet unlike pecan growers in Georgia, who are tightly organized, Texas pecan growers are notoriously independent. They have little in common; they range from people who thrash a single tree in their front yards to owners with thousand-acre orchards. And they don’t much like pooling their resources, as Cindy Wise discovered in 1992, when the Texas Pecan Growers board encouraged its membership to support a national industry-wide marketing effort overseen by the U.S. Department of Agriculture. She and some of the larger pecan growers envisioned some sort of gimmicky campaign—dancing nuts maybe, like the California raisins. To fund it, growers would pay an assessment of half a cent per pound on in-shell pecans and 1 cent per pound for shelled nuts; the accumulators and the shellers would be the tax collectors.
The plan’s supporters intended to target nut nuts north of the Mason-Dixon line. “Taste tests and research show that the pecan is the nation’s preferred nut,” Wise says, “but it’s not as well known outside of the South.” The marketing campaign sought to educate Northerners about the true taste of pecans. Pecans have a high oil content—that’s what gives them their rich flavor—so they need to be frozen when shipped; otherwise, they turn rancid. If Northerners knew how a good pecan really tasted, the reasoning went, a market would develop and grocers would buy nut freezers for proper storage.
The pecan marketing effort raised close to $700,000. The pecan industry created a marketing board, created ad copy, and worked out a joint promotion with the International Ice Cream Association (butter-pecan is America’s fifth favorite flavor). They even sent a pecan basket to Willard Scott of the Today show. Yet there was no way to measure the success of those early initiatives, and before long, some Texas growers and accumulators began to ridicule the effort. They grumbled about the silliness of the campaign and about “taxation without representation.” Since they do a lot of their business on a cash basis—some of it, just maybe, unreported—they didn’t cotton to the idea that their records would be open to inspection. When, after two seasons, they got their chance to vote on the plan, they rejected it overwhelmingly. “There was lots of animosity,” Wise recalls.
Wise still insists that pecan production is ripe for expansion, particularly in the western reaches of the pecan belt. She’d like to see another marketing effort soon, perhaps a more limited statewide approach similar to one in Georgia in which growers with thirty acres or fewer would be tax exempt. But without the cooperation of growers of all sizes, all she and other pecan pros can do is keep pushing for a managed approach.
That’s what A&M’s McEachern was doing one morning toward the end of the harvest season as he stood beside a backyard swimming pool on a family farm near Devine, south of San Antonio. In his friendly drawl, he sought to cajole sixty or so South Texas growers into using more scientific farming methods. The growers, most of them older white men wearing caps or cowboy hats, sat on folding chairs and listened for nearly an hour as McEachern dispensed practical advice about the importance of tree spacing, nitrogen and zinc fertilizing, and giving trees the right amount of water. The scientific approach, McEachern told the growers, was the key to Georgia’s success—even with thin, worn-out soil. It would be the key to their success as well.
“We’re entering a brand-new era here in 1996,” McEachern said optimistically, and the growers seemed receptive enough to his ideas. But he had a lot of history to contend with, and in his heart he knew they would be tough nuts to crack.
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