Way way back in the dark ages around 2012, I had an idea. It was for a futures market in nuts. Not peanuts. Peanuts are not a good commodity to build a market around because there is far too much vertical integration and government interference.
Peanut butter costs quite a bit more per jar because of how government screws up the peanut market. I can’t remember the exact number but five cents seems about right. But, at 612.4 million units of peanut butter sold per year it is not chump change.
The idea I had was around tree nuts.
Brazil nuts
Cashews
Hazelnuts (filberts)
Macadamia nuts
Pecans
Pine nuts (pinon, pignolias)
Pistachios
Walnuts
The reason I had the idea was a company I was invested in, Simple Mills, used almond flour in one of their products. I was thinking of ways to hedge the cost of production since almonds are farmed in one area of the country and they can have high input costs. Simple Mills still uses almond flour but has expanded their ingredient inputs to different products. They also heavily support regenerative farming.
Another trend putting upward pressure on prices back then was the Chinese thought pecans extended your life. They were in high demand and there was nowhere for a pecan farmer to hedge.
Futures exist because they help solve the problem of risk. There are risks to the farmer. There are risks in production. It’s not a gigantic market like other commodities. Coffee, Cocoa, and Orange Juice come to mind. But, it’s not a tremendously vertically integrated market either so I think it could be ripe for a futures market.
My friend Ted Pratt sparked the idea again. Hurricane Helene rippled through the Georgia pecan orchards and wrecked about 50% of the crop. Ted lives in Atlanta and runs a pretty cool marketing firm called Fizz. Ted turned the Pabst Blue Ribbon brand around.
Futures on nuts would be a good idea for a lot of reasons.
One of Ted’s clients today is Stuckey’s. If you are like me and have spent a lot of time cruising in your car on interstate highways east of the Mississippi, you know Stuckey’s. Stuckey’s has been around for almost a century. It is a candy store with a gas station.
One of Stuckey’s main products is a pecan roll. The Stuckey’s pecan roll is a beloved piece of candy all over the South. With pecan farmers getting decimated, it’s not great for Stuckey’s. They are doing what they can to help and you can too. Donating to this cause will help pecan farmers directly via Stuckey’s. No legions of middlemen sucking up the money. You receive some pecans just in time for Thanksgiving and the holidays. If you haven’t made bourbon old fashioned pecans they are addicting. I add a pinch more cayenne pepper since pecans are kind of sweet on their own. I highly recommend it for any holiday celebration or party.
I hope you can help the farmers out.