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Pecan shortage and higher export demand causes prices to soar

Friday, November 18, 2011 | 2:49 p.m. CST

KIMMSWICK — The Blue Owl Restaurant and Bakery in Kimmswick owes its success to a few things: Hard work, big pies and lots and lots of pecans.

"Almost everything we make has pecans," said Mary Hofstetter, the bakery's founder, owner and in-house cheerleader. "The pies, the tartlets. Even the butterhorns have pecans in them."

So, when Hofstetter is asked what a pecan shortage might do to her business, a rare darkness sweeps briefly across her face.

"I don't know what we'd do without pecans," she said, shaking off the notion. "We don't like to think that way at the Blue Owl. We like to think positive."

Positive thinking may be in order.

The U.S. is the largest producer of pecans, which are native to the South. But a drought in prime pecan-growing areas this year, coupled with a huge surge in demand for pecans from China, has forced prices upward. Now some pecan-dependent companies are scrambling for nuts as the pecan-centric holidays approach.

"Some distributors don't even have pecans to give right now," said Reed Burns, of St. Louis-based Bono Burns Distributing, which supplies the Blue Owl with pecans. "People can't find pecans, and they're calling us, and we have to say no. We only have enough for our contracts with our customers."

The price Burns pays per 30-pound case of pecans has shot up from $160 to $260 over the last year.

"We've never seen pecans this high before," he said. Retail prices, which last year hovered around $9 a pound, are predicted to hit $11 a pound this year.

"China, in 2006, bought 9 million pounds of in-shell pecans," said Drew Kimmell, of Missouri Northern Pecans, a co-operative of growers that runs a shelling plant in Nevada, about 270 miles west of St. Louis. "By 2009, they had increased their purchase to 88 million pounds. When you get 30 percent of the crop taken by new demand, prices are going to go up."

According to pecan growers here, companies in China market pecans with claims that they will boost brain health and cure illnesses.

"Pecans are good for you," Kimmell said. "But they're not going to cure cancer."

Record drought in Texas and Louisiana, two top pecan-producing states, is exacerbating the problem. The Texas pecan harvest dropped to 40 million pounds from 70 million, while the Louisiana harvest dropped to 9 million from 20 million. The U.S. Department of Agriculture expects total U.S. production to drop 14 percent, to about 252 million pounds this year.

Missouri, which produces about 5 million pounds in a good year, will probably get only 1.5 million pounds this year from its pecan trees during the harvest going on now.

"I would guess we've lost half of the pecan crop just in the last two months due to the drought," Kimmell said.

Over the past 15 years, the number of pecan growers in Missouri has jumped to 390 from about 340, and total harvested acreage has gone up to 13,400 from about 7,100. Most of the growers are clustered in the southwestern part of the state, where they harvest the nuts from native, nongrafted trees.

"Ninety-nine percent of our pecans are wild," Kimmell said. "Planted by God and the squirrels."

The state's pecans are smaller and sweeter than the larger pecans produced farther south, most of which come from grafted trees, Kimmell explained.

Although some Missouri growers are facing a bad year, others are getting lucky.

Vern Spaunhorst, a retired engineer, planted a grove of grafted pecan trees three decades ago on his farm in Washington, hoping it would provide some income in his retirement years. Last year the trees produced well, and Spaunhorst sold about 700 pounds. This year looks good, too. Spaunhorst just harvested the pecans recently and is preparing to sell them.

"I probably should raise the prices," he said. "But this is only my second year, and I don't want to raise them too much."

Hofstetter, too, said she won't raise prices unless she has to, though she has had to cut back on the amount of pecans she uses in some pies. "That's lower than what it used to be," she said, pointing to a pecan pie that, nonetheless, is heaped with nuts.

For Hofstetter the timing of the pecan price spikes is particularly bad — or good, depending on how you look at it. Recently, Oprah Winfrey's O magazine picked the Blue Owl's "Carmel Pecan Levee High Apple Pie" — a towering effort containing 18 apples, covered with pecans — as one of Winfrey's "Favorite Things" for the holidays. The anointing — every business owner's wildest dream — has triggered a flood of calls from all over the country.

"Every call is 'Oprah. Pie. Oprah. Pie,'" Hofstetter said.

But Hofstetter said she's prepared for the onslaught. Over the past several years, the Blue Owl has been featured on the Food Network and other shows, and she knows what a little media attention can do. "Once we found out we got the blessing from Oprah we thought: We need to get ready," she said.

So now Hofstetter just hopes the pecan supply holds. If it doesn't, she jokes, "I guess I'll just have to get on a plane to China."

Or switch to walnuts.


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