If you decide to get into a 'forward contract' agreement with a commercial buyer, you will have to sell your crop to him. However, when entering into such a contract, you will know how much you will receive for your crop. Producers of large volumes of pecans tend to use forward contracting more than do producers with smaller production. A forward contract is a written agreement between a producer and a pecan sheller relating to the delivery and acceptance of pecans at some future date. Forward contracts specify what the producer will deliver. The shellers promise payment for the pecans, either by specifying the price or how the price will be determined. Shellers usually initiate forward contracts to assure themselves of enough pecans to supply their customers. Producers benefit from forward contracts by having an assured access to a market, the potential for increased operational efficiency, and reduced price risk.
We chose to sell our pecans directly to the consumer early on in our pecan adventure. We discovered that commercial buyers simply weren't interested in purchasing small quantities of pecans. The first year that we produced a respectable crop, I put a sign down by the road and ran a newspaper ad in the local paper. We had one customer that year. I then realized I was trying to sell pecans to folks that already had a pecan tree in their back yard or lived next to someone who did. Selling pecans in pecan country is like a West Texas farmer trying to sell cotton to his neighbor. "Nope, got cotton over at my place, too."
Your first order of business is to produce top quality pecans that will receive a premium price. Do your homework before the nuts begin to fall and have several options you can turn to when your crop is ready to harvest. When harvest season is at hand, know what the current average market price is. Finally, when Joe Blow Pecan Buyer offers to give you pennies on the dollar for your premium pecans, tell him, 'No, thanks...I know where I can do better.'