Texas Pecan Crop Grows, but Heat Puts Kernel Quality and Prices in Play

Texas pecan production is on track for a clear volume rebound in 2026, but intense late-season heat and dryness are putting kernel quality – and thus effective market supply – at risk. Prices have recovered from recent years and are likely to remain firm in EUR terms as buyers weigh larger crops against quality uncertainty and elevated grower costs. The 2026 season is shaping up as a classic volume-versus-quality story. Texas is heading for a significantly bigger harvest than last year, yet hot, dry conditions during the critical nut-filling stage and high disease and pest pressure are raising the share of lower-grade nuts and production costs. While this should improve availability of mid-grade material, premiums for top-quality kernels are likely to hold or widen, especially if early results from Georgia and Louisiana confirm similar weather-related quality issues. Spot offers for Mexican organic pecans in Europe remain broadly stable in EUR, underlining a market that is better supplied but far from oversupplied.

Prices

Wholesale prices for the 2025 pecan crop improved at times compared with 2023 and 2024, with some lots trading above about €4.10/kg and approaching roughly €6.15/kg during Q1 2026 (converted from USD). This recovery reflects tighter high-quality supplies in prior seasons and ongoing cost inflation along the value chain. Current offers for Mexican pecans into export markets also signal a firm, but not overheated, tone. Recent quotes for organic broken kernels from Mexico are around €21.50/kg FOB, while conventional halves are trading close to €26.85/kg FOB, with only marginal movement over the past three weeks. Given the prospect of higher Texas volumes but uncertain kernel quality, the market is likely to maintain a two-tier structure: competitive pricing for standard grades, with resilient premiums for well-filled, high-kernel-yield lots.

Supply & Demand

Industry forecasts point to a significantly larger Texas crop in 2026, in a range of about 39–42 million pounds (17,690–19,051 tonnes), up from roughly 32 million pounds (14,515 tonnes) last year. This implies a 22–31% year-on-year increase in state production and a notable boost to overall US supply. However, effective market availability will depend on how much of this crop meets premium kernel standards. Hot, dry weather set in across much of Texas just as trees entered the critical kernel-filling period from August into September, a stage that coincides with peak water demand. Irrigated orchards are better positioned to maintain kernel fill, but non-irrigated or water-limited groves face a higher risk of shriveled or malformed kernels. Disease and pest pressures are adding further complexity. A wet spring created favourable conditions for pecan scab, downy spot and powdery mildew, while pecan nut casebearer pressure has been above normal and webworm activity has increased as the crop matures. In the Coastal Bend region, hot and dry conditions have already caused some nut shedding, adding to potential yield losses even as the statewide crop grows.

Weather & Regional Differentiation

Weather patterns across Texas have shifted from a beneficially wet spring to a hot, predominantly dry late summer, with current forecasts showing mostly sunny, hot conditions and daytime highs frequently in the mid-30s °C over the coming days. This pattern sustains high evapotranspiration and keeps irrigation demand elevated during the tail end of kernel filling. Water availability is highly uneven. West Central Texas orchards require ongoing supplemental irrigation, while growers around El Paso rely on effluent and well water. These disparities mean that kernel development and final quality could vary widely between regions, even if total volumes increase. The market may therefore see notable origin- and region-based quality spreads within Texas itself.

Fundamentals & Margins

Despite better crop prospects, grower margins remain under pressure. High diesel, gasoline and fertiliser costs are raising baseline operating expenses, while stronger disease and pest pressure is forcing additional fungicide and insecticide applications. These factors limit the willingness of producers to accept significantly lower prices, especially for higher-grade nuts. Many growers are responding by expanding direct-to-consumer and short-supply-chain sales to capture more of the retail value. Retail pecan prices are expected to rise modestly in line with wider food inflation, reinforcing the need for processors and traders to differentiate quality and origin to protect margins. For shellers and traders, the key watchpoints now are: September weather outcomes, evidence of kernel shrivel in non-irrigated blocks, the extent of nut shedding in stressed regions, and early harvest indicators from Georgia and Louisiana, which will shape perceptions of North American supply balance.

Trading Outlook

• Shellers / Processors: Prioritise contracts with irrigated and historically high-kernel-yield orchards in Texas, locking in volumes of premium-grade nuts before harvest data is fully priced in.
• Industrial Buyers: Use the current period of price stability in EUR to secure forward coverage for standard grades, while keeping some flexibility for premium lots until clearer quality signals emerge from early harvests.
• Growers: Consider segmenting sales between direct-to-consumer channels for top-quality kernels and longer-term contracts for lower grades to protect overall returns amid higher input costs.

Over the next three trading days, European pecan prices in EUR are likely to remain broadly steady, with a slight upward bias for premium kernel lots as buyers increasingly factor in Texas quality risks and monitor early crop conditions in other US producing states.