Happy Pecan Farmers
With soaring demand from China and less supply in the U.S., you have some very happy pecan farmers.
However, they have one big problem. Theft.
Armed with ladders, pecan snatchers are shaking the trees in Georgia’s pecan groves, catching the nuts and then selling them to small roadside vendors. Farmers have hired guards to protect thousands of acres of their property.
Demand is up in China because pecans have become an aspirational nut. Consumed by the more affluent, they are associated with more wealth and good health. Meanwhile, in the southern U.S., dry weather has lowered the pecan crop yield. You know the result. Pecan prices are way up, from $7 to $11 a pound since 2009.
Faced with a similar price spike, hog producers in Minnesota and Iowa have had 150 pound pigs disappear from their farms.
The Economic Lesson
So high a price has meant pecan and pig poaching was worth the risk. We could say that the cost of a felony became relatively smaller as the benefit of the crime increased.
An Economic Question: Referring to determinants of demand and supply, draw and explain graphs that illustrate the higher price for pecans.