Dear Prospective PPI Member,
Thank you for your interest in the Pecan Producers, Inc. grower owned cooperative. PPI could not exist without growers like you. The services provided by PPI have you, the pecan grower, in mind. PPI is dedicated to assisting you in producing the best quality pecans you can and in marketing those pecans once they have been harvested to get you the best return on your investment.
The following explains in further detail the advantages of being a member of the Pecan Producers, Inc. family of pecan growers.
Thank you for your support,
Pecan Producers, Inc.
PURPOSE OF PPI
PPI is dedicated to improving the price the grower receives for his pecan crop through marketing activities. Further, PPI provides services that assist the grower in reducing the cost of growing and marketing his pecans. Through efforts targeted at reducing expenses and increasing income, PPI can improve the efficiency and profit potential of member pecan growers.
How can PPI improve the prices paid to growers?
Pecans are a commodity and the price is set by many market factors beyond the control of either the individual grower or sheller. These factors include cold storage carryover, estimated size and quality of the current crop, current price of nutmeats, current and projected interest rates, and the price and crop estimates of competing nuts. The prices paid to growers by accumulators and buyers during the harvest season are based upon the purchasers (shellers’) conservative projections of these factors into the economic conditions of the following market year. PPI’s approach to this chaotic market situation has evolved through several years of careful evaluation. The resulting marketing process is orderly, fair, and provides a price to the grower that avoids middleman costs.
How does PPI determine the price paid for pecans?
PPI has been an industry leader in the establishment and use of pecan grading and yielding standards as the basis for pecan prices. Each lot of pecans is sampled. The sample is sized and then hand shelled. The yield is calculated from the percentage of sound nut meats (by weight). The nut meats are checked for compliance with moisture content guidelines and graded by color and kernel quality into four categories: Fancy, Choice, Standard, Amber, and Light weight. This data is used to determine the type and grade of nut meats that will result from shelling the lot. The actual prices of the various nut meat sizes and grades in the nut meat marketplace are then used to determine the final price to the grower. This method is complex, but results in the grower of high-yielding fancy pecans receiving the top prices that these pecans deserve. The use of grading and yielding provides assurance that the price each grower receives reflects the value of his pecans.
When does the grower receive payment for his pecans?
Depending on when, and where, the pecans are delivered the grower is usually paid in about one week. The time it takes to process payment for the grower can vary due to grading time, load size, and place of delivery. For example, many small loads are combined together to make one large load to go to the sheller. The gathering of these loads can cause a short delay in the grading of the pecans and the payment processing.
DELIVERIES & TRANSPORTATION
Is a member required to sell all pecans to PPI?
No. In fact, members are encouraged to maintain and increase direct sales of inshell pecans into the retail markets. PPI does offer inshell retail marketing assistance and does “deal” in retail inshell pecans. Participation in these activities is strictly voluntary. However, profits from pecans sold through the cooperative are returned to the grower, and it is doubtful that other buyers and accumulators will return their profits to you. For this reason, PPI encourages all of it’s members to give PPI the “right of first refusal” for their inshell pecans.
How are the pecans delivered and how much does it cost?
The buyer usually covers all expenses associated with pickup, hauling, and grading of reasonable size lots. Collection points in Texas and Oklahoma provide for accumulation of trailer truckloads and efficient transportation. PPI has been innovative in the use of bulk handling and will make arrangements for bulk trailers for the growers. Bulk handling is the most economical delivery system in that all costs are covered by the sheller, and the grower merely has to fill the trailer and call for a pickup. Further, the use of super sacks (1000+ pound capacity) is encouraged for those growers who have the capability of handling the large bags. The use of super sacks has been very successful in reducing the bagging and handling costs associated with burlap bags. PPI does not receive any burlap bags because of food safety issues. The super sacks are either owned by, or rented to, the grower. Many growers now harvest directly into the super sacks and use them as storage at all stages of processing.
What other services are offered by PPI?
PPI purchases chemicals for resale to the membership. A complete line of pecan pesticides, fungicides, herbicides, and foliar nutrients are available, including special formulations of “hard-to-get” materials unique to the pecan industry. The large purchasing volume often allows substantial savings to be passed along to the growers. A single source for all chemicals is a convenience that many growers appreciate.
PPI is a licensed dealer for super sacks in the pecan industry. Further, most sacking supplies, including 50 pound red mesh bags for the inshell trade, are available through PPI; several small gift packages containers are available from PPI.
Special arrangements are available for growers to store pecans through the year in cold storage in order to supply the needs of the early market during the following crop year.
Sources of Capital and Income
The basic capitalization of PPI is through the sale of stock to each member.
The cost of doing business is basically covered by a commission retained by PPI from the buyers. Several sources of income serve to offset or reduce this fee. Since the PPI membership cannot supply the total requirement of pecans to the buyer, a nonmember pecan purchasing activity is operated to the extent allowed by the Capper-Volstead Act. The income produced by the purchasing and resale or brokering of these nonmember pecans is also used to help finance the cooperative.
THE ROAD AHEAD
The members of PPI all share a concern for the growth of the pecan industry and believe that with the thousands of acres of new orchards reaching the productive stage, and larger imports, new initiatives are required to increase the consumption of pecans on a national basis. The development of new exclusive markets for the members’ pecans is a high priority activity that is being aggressively pursued. PPI intends to grow and will be pleased to accept new members that appreciate the value of a fair price and market regardless of time of deliver.
PPI- Grower Owned Cooperative
Pecan Producers, Inc