High Heat, Low Demand Hurt Walnut Crop

By Christine Souza, California Farm Bureau

California farmers are tearing out walnut orchards, such as at this farm near Winters, in response to quality concerns due to a September heat wave, lower demand and prices, and other market issues. The California Walnut Commission estimates $1 billion in damages to the 2022 crop.

Walnut farmers are tearing out older trees and less desirable varieties as the price for the nut has plummeted well below the cost of production, causing some growers to rethink walnuts and look for alternative crops.

“I’ve seen several younger orchards that have come out already in Fresno, Merced and Madera counties,” said Kings County farmer Brian Medeiros of Hanford, who farms walnuts, almonds and row crops. “My neighbor had a walnut orchard that was about six years old, and he tore the whole thing out. He just said, ‘I’m losing money hand over fist. I’m not going to keep doing it.’”

A heat wave last September cooked the walnuts on the trees during a critical time of the growing cycle. High temperatures were followed by rain that led to mold problems.

“We had extremely high temperatures—up to 117 degrees for three to four days in some areas—and this occurred when walnuts were at their most sensitive stage in growth,” said Robert Verloop, president and chief executive officer of the California Walnut Board and California Walnut Commission. “We conducted our own informal survey of about 75% of the industry and documented pretty clearly that the range is anywhere from 30% to 40% of the (walnut) volume that was impacted. That means if the handler opens up 100 pounds of walnuts, 30 to 40 pounds is absolutely not usable.”

Walnut growers in Stanislaus County demonstrated to the county agricultural commissioner that there was 36% loss in crop volume, Verloop said. The growers provided damage information within the required 60 days, which led to a federal disaster declaration.

On Jan. 13, U.S. Agriculture Secretary Tom Vilsack designated a disaster declaration for Stanislaus County and contiguous counties of Alameda, Calaveras, Mariposa, Merced, San Joaquin, Santa Clara and Tuolumne for walnut losses due to the heat wave last September.

Farmers in qualifying counties have eight months from the date of the declaration to apply for emergency loans through the U.S. Department of Agriculture Farm Service Agency. The California Walnut Commission is working with federal lawmakers on additional aid, including walnut purchases by USDA for food banks and tree-pull programs.

With the price to growers for the 2022 walnut crop at about 40 cents per pound or less—and well below last year’s break-even price of between 70 and 90 cents per pound—walnuts were the obvious choice for removal for Medeiros, he said. He pulled out 16 acres of walnut trees to scale down his water use to comply with groundwater regulations and manage his allotment.

“Our orchard is only 15 years old, so when I was pulling out those 16 acres, it literally broke my heart because I’m pulling out beautiful trees that look gorgeous, and I’m bulldozing them over,” Medeiros said. “The (walnut) price is making it much easier, much quicker for us to move ahead because—unless this price changes dramatically in the coming year or we have some outstanding support from USDA—we’re probably pulling the rest of them out next year.”

Stanislaus County farmer Gordon Heinrich of Modesto, who farms walnuts and operates a huller and dehydrator, said the price of walnuts is at a 30-year low, and input costs have gone up substantially.

“We’re actually operating below the cost of production right now, and everybody’s scratching their heads trying to figure out where you can cut back on your inputs to survive this market situation,” Heinrich said.

“There’s not a lot of places you can cut,” he added.

Handlers are advising walnut growers to remove older, darker-kernel varieties such as Vina, Serr and Hartley, to maintain the supply of light walnuts, Chandler, Tulare and Howard, that global buyers demand.

“Growers are starting to realize that all those older varieties need to be taken out and replanted with a more modern variety, such as a Chandler,” Heinrich said. “The quicker that we can change our market strategy as far as being able to put a better product on the market, the longer this is going to last. It is going to right itself in time, but there’s a lot of farmers out there who are going to have a real tough time.”

Verloop said handlers reported 20% to 50% of the 2022 walnut crop was substandard in quality and is better suited for cattle feed. He said the commission estimates the farm-gate loss to growers is $1 billion.

Aside from quality problems, Verloop said many different factors affect the market for California walnuts, much of which are exported to Europe, Turkey, India, Spain, Japan, Korea and the Middle East.

“The problem is the pipeline to the consumer has a lot of walnuts in it already,” Verloop said. The carryover from the 2021 crop of about 135,000 tons, he said, and the 2022 crop is expected to be between 750,000 tons to 780,000 tons and much larger than the 720,000-ton crop forecast last September.

Retaliatory trade tariffs and the COVID-19 pandemic added to the walnut supply-demand imbalance and led to trucking and transportation challenges, congestion at the ports and a slowing of consumer demand. Inflation, the higher value of the dollar and the war in the Ukraine also are affecting customer confidence and buying power, Verloop said.

“We’re in the middle of that perfect storm,” Heinrich said of the global and economic stressors impacting the walnut market. “We’re hoping that we can just hang on. We’re lucky with our operation that we’re somewhat diversified, but even almonds are struggling with some of the same problems.”

Bill Carriere, president of Carriere Family Farms—a grower, processor and marketer of walnuts in Glenn County—said it is a very nervous time for growers and handlers.

“Sales were slow in general, and you had quality concerns that doubled the problem. That really hurt storage, so our storage is full. There are walnuts in warehouses that are not normally in warehouses,” said Carriere, who added that 20% of the 2022 walnut crop he received is not salable. “In our operation, we’re losing much more money as a grower than we are as a handler, but we’re losing in both.”

To recover from this year’s challenges, Verloop said, “the goal right now is to remove all of the substandard quality product off the market and let the good quality product price start to come up a little bit.”

For the next year or two, Verloop said he expects a downsizing of the walnut sector as growers remove less productive acres and less desirable heritage walnut varieties.

“We’re working with all of our trade agencies around the world to take a look at what can we do to recover from this year,” Verloop said. “We think there’s a lot of trust and confidence long term in our product from California because it’s been the gold standard. We’re working hard on several different fronts to make sure that we’re better positioned in the future.”

Growers seeking more information about disaster assistance and other program relief are encouraged to contact their local Farm Service Agency.

California Ag Today2023-02-01T14:36:16-08:00February 1st, 2023|

Aubrey Bettencourt Will Head up Almond Alliance

Almond Alliance of California Names Aubrey Bettencourt as President/CEO

The Almond Alliance of California (AAC) has named Aubrey Bettencourt as its new President and CEO. She currently serves as Director for Sustainability for the California Cattle Council and Western United Dairies and has extensive experience dealing with a wide range of California agricultural and natural resource issues.

Bettencourt succeeds Elaine Trevino, who has been nominated by President Biden to be the Chief Agricultural Negotiator for the U.S. Trade Representative. Trevino is awaiting a confirmation hearing before the U.S. Senate Finance Committee.

Almond Alliance Chairman Mike Curry said Bettencourt’s selection came after an extensive and thorough executive search. Curry commented, “We are extremely excited to have Aubrey Bettencourt as the Almond Alliance’s new President and CEO. Aubrey comes to us with a wealth of diverse knowledge and innovative advocacy work on behalf of farmers and ranchers. As the California State Director of the USDA Farm Service Agency, she fought to keep ‘farmers farming’ through the delivery of effective and efficient agricultural programs.

Serving as Deputy Assistant Secretary in the Water and Science Division of the U.S. Department of the Interior, Bettencourt developed and coordinated national water and science policy, expanding her extensive knowledge of state and national water issues and available resources, making her a unique asset to our membership and community.” Curry added, “Aubrey’s work as the director of the statewide non-profit, California Water Alliance, has given her the tools necessary to advocate for our members as the water crisis in California becomes even more complicated.

As the Director of Sustainability for the California Cattle Council and Western United Dairies, Bettencourt has focused on water supply and water quality, forest health and fire prevention, carbon sequestration, climate resiliency and ground water sustainability. Raised in a farming family, Aubrey has firsthand knowledge of what it takes for a family farm to survive in California and beyond.” “I am excited to join the Almond Alliance, a dynamic leader in American agriculture,” Bettencourt said. “As a fourth generation California farmer, it is a personal honor to serve. I look forward to working with this team to keep farmers and processors providing economic opportunity to our rural communities, bringing worldwide the highest quality product from our farms to your table.”

Bettencourt noted, “The California almond farmer is the most sophisticated in the world; leading in technique, technology, sustainability, safety, and quality. We take pride in this role and great responsibility in this legacy. The challenges we face as an industry including water, labor, energy, supply chain, and climate change, are opportunities for our continued leadership and advocacy. Rather than reacting, we will lead with our own achievable, common-sense solutions to these challenges for the continued success of our farmers, our communities, our businesses, our environment, and our consumers.” Curry noted that in her three years at the helm, Trevino led the almond industry through some very challenging times and wished her the best in her new position.

“I am so incredibly excited for Elaine and her nomination by the President to be the next Chief Agricultural Negotiator at USTR,” Curry commented. “As the President and CEO of The Almond Alliance, Elaine has led our industry through very difficult times. From trade wars, labor issues, struggles during the pandemic, to port issues, Elaine has been a fierce leader fighting the good fight. In every step of the way she has done the good work for California. Yet, Elaine has always kept the communities of our members at top of mind, knowing the economic impact the almond industry has on so many California communities. Elaine has been a true advocate for the good of all. Elaine is the type of leader with the focus to leave things better then she found them.” Looking ahead to her new role, Curry said, “There is no doubt in my mind that as the Chief Agricultural Negotiator, Elaine will continue to be the person who adopts real solutions to real problems.

The United States agricultural community has gained a true problem solver in Elaine Trevino. “ Elaine thanked Almond Alliance members and partners for their support over the past three years. “It has been an honor to work for the Almond Alliance,” she said. “Together we took the Alliance to new heights and strengthened the voice of almonds in Sacramento and Washington DC. Thank you for the opportunity you have given me to lead one of the best agricultural associations in the country. I look forward to staying in touch and learning about the Almond Alliance’s future successes.”

Bettencourt will assume her new role on December 1, 2021 and will work out of the Alliance’s Modesto office.

California Ag Today2021-11-29T11:01:56-08:00November 29th, 2021|

Congressional Leaders Learn About Almond Pollination

Almond Board Briefs Congressional Caucus About Pollinator Coalition

Chief Scientific Officer Josette Lewis highlights coordinated efforts of state’s farm and conservation communities.

Lewis was one of four speakers, and the only representative from agriculture, at the virtual congressional briefing on the status of pollinators convened by Reps. Rodney Davis (R-IL) and Jimmy Panetta (D-CA) during National Pollinator Week. They are co-chairs of the Congressional Pollinator Protection Caucus.

“This hearing, and this week, were extremely valuable because they helped raise awareness about the need to protect all pollinators and their habitats,” Lewis said. “For the California almond industry, every week is pollinator week. This is something we work hard at every day.”

During the briefing, Lewis detailed the steps being taken by the California Pollinator Coalition and why its brand of collaborative conservation is a strong model to both bolster the health of pollinators and to set an example for a range of effective environmental alliances among independent groups.

The pollinator coalition includes more than 20 California organizations and was spearheaded by the Almond Board of California (ABC) along with the Pollinator Partnership and the state Department of Food and Agriculture. It represents the large majority of agricultural acreage in the state and its goal is to expand pollinator health and habitats on working ag lands.

Bees pollenating almonds.

“The representatives heard how the coalition represents agriculture putting its best foot forward,” Lewis said. “Given the crucial importance of pollinators to food production and to ecosystems, it’s essential that agriculture be part of the solution. That’s one reason ABC partnered with the Pollinator Partnership to help build this coalition. We know the almond industry and the ag community can continue to help.”

A key subject the congressional leaders wanted Lewis to address was the value of collaborations like the Pollinator Coalition, how they can be built and how they can help in areas ranging from research to shared incentive programs.

One incentive example is ABC’s Bee+ Scholarship program, which pays up to $2,000 of the cost of seeds for pollinator-friendly cover crops and has added 15,000 acres of pollinator habitat in almond orchards in its first year. It will also cover the fees to register as a Bee Friendly Farm.

“The goal is to reduce the risks to growers to try new practices that can benefit pollinators and growers alike. One size does not fit all growers, so this offers a chance to try something new,” Lewis said. “Collaborations are effective because everyone has a stake in healthy ecosystems and healthy food, and together we can help each other take actions and make a difference.”

California Ag Today2021-06-30T12:52:43-07:00June 30th, 2021|

Patrick Cavanaugh Retires as Long-Time Print Editor

Cavanaugh Will Continue as Editor of CaliforniaAgToday.com and Broadcast Radio Reports

Following more than 36 years at the editor’s desk, Patrick Cavanaugh decided to end his month-to-month deadlines for Pacific Nut Producer (PNP) and Vegetables West magazines. Since his first stories in 1985, where he felt like an undergrad in a Ph.D. class until the April 2021 editions, Cavanaugh has written more than 2000 feature stories and edited both magazines.

“My career has been a rewarding journey of discovery, an appreciation of the movers and shakers in this innovative industry that feeds the world, and an opportunity to convey the challenges, complexities, and forward-thinking leadership that have shaped this essential industry,” noted Cavanaugh,

“When I first began my agriculture journalism work in California, it was for another publishing company no longer in business. In 1995 I left that company to launch PNP, which I co-owned with Dan Malcolm, Malcolm Media,” said Cavanaugh. “After the first issues were published, the other publishing company, who published Nut Grower magazine, went out of business. It was time for PNP to take off, and it did.”

Tree nut nurseries were providing new and better varieties, and growers were planting them. It was great seeing the dynamic industry become the dominant business that it is.

Looking back on those early days of covering the industries, there is a vast difference now. “For example, I remember the early Almond Board Annual meeting that consisted of a long table on a riser with elected handlers and growers sitting in particular seats. It was a half-day meeting. Today, the annual Almond Board Meeting has been expanded to nearly three days with scores of educational talks and a massive trade show,” said Cavanaugh.

Cavanaugh in his Tucson office.

“From my vantage point, I have witnessed the incredible growth of this dynamic industry. In 1985, Almonds were on 400,000 acres, Pistachios were on 51,000 acres, and walnuts on about 134,000 acres. Tree nut nurseries have been providing new and better varieties, an increasing number of growers were planting these permanent crops, and tree nut acreage has more than doubled,” he said.

“Among the most important stories I’ve covered for Vegetables West was in 2007. Following a tragic outbreak of E. coli linked to fresh spinach that sickened more than 200 people,” said Cavanaugh. “California farmers made an unprecedented commitment to protecting public health by creating the California Leafy Green Products Handler Marketing Agreement (LGMA). The program’s goal is to assure safe leafy greens and confidence in our food safety programs,” he noted.

Cavanaugh grew up in Florida and became very interested in agriculture. He studied agricultural production at the University of Florida. Upon graduating, he moved to Tucson to escape the humidity of the south.

Farmed Jojoba and Table Grapes in Arizona

While in Tucson, he worked for an Ag Management company producing 500 acres of jojoba that we pressed the oil from and sold the oil to cosmetic companies. The farm was near Casa Grande, about an hour north of Tucson. Cavanaugh was the ranch manager, and the company eventually converted the jojoba ranch into table grapes. Once we had Arizona’s Finest crop in cold storage, it would be sold and distributed to grocery stores in Phoenix and Tucson, as well as surrounding areas.

While at the ranch, Cavanaugh began writing freelance articles for the original company. Eventually, Harry Cline, the company’s editor, made an offer to come to Fresno and work for the company. “That’s what I did. And Harry became a valuable mentor,” he said.

While his magazine writing career is ending, he will still oversee CaliforniaAgToday.com and broadcast a daily Tree Nut Report for the Ag Information Network. That report is broadcasted throughout the state.

“Two years ago, my wife Laurie and I moved back to Tucson. We love the Southwest and wanted to return,” noted Cavanaugh.

“Lastly, I want to say that I am in awe of farmers, and I am grateful for their work to provide food for all of us. It has been a true joy to know so many growers and being on your farms,” he said.

California Ag Today2021-06-21T15:37:25-07:00June 21st, 2021|

UC Offers Almond Production Short Course Nov. 5–7

Almond Short Course For Growers To Learn More

By Pam Kan-Rice UCANR News and Information Outreach

UC Agriculture and Natural Resources will host the UC Almond Short Course Nov. 5-7, 2019, at the Visalia Convention Center.

UC faculty, UC Cooperative Extension specialists and farm advisors and USDA researchers who will provide in-depth, comprehensive presentations of all phases of almond culture and production. An optional field tour will be offered on Nov. 8 in Parlier.

The program is based on the latest information and research and will cover the fundamental principles that form the basis for practical decisions. Each session will include Q&A, quality time with instructors and networking opportunities. The full agenda is at https://ucanr.edu/sites/almondshortcourse/2019_Agenda.

This year’s short course offers an in-depth field tour at the Kearney Agricultural Research and Extension Center on Friday, Nov. 8. For an additional fee, participants can learn firsthand about topics ranging from orchard establishment and management to integrated pest management. See the tour agenda at https://ucanr.edu/sites/almondshortcourse/2019_Field_Tour.

Registration is $900, discounts are available until Oct. 21. On-site registration will be $1,000.

Registration includes:

Three full days of instruction with more than 35 presentations
Binders containing presentations
Three lunches and two receptions
DPR (PCA) & CCA continuing education credits (pending approval)
Option to add Field Tour for $65

California Ag Today2021-05-12T11:01:46-07:00October 15th, 2019|

Almond Board Schedules Market Facilitation Program Workshops

2019 Market Facilitation Program Workshops October 7 | October 11 | October 15 | October 16

USDA’s Market Facilitation Program (MFP) is continuing for the second year, providing almond growers with an opportunity to apply for direct payments to help alleviate the damage resulting from the global trade situation.

Unlike the 2018 program when payments were based on delivered pounds, the 2019 MFP program is based on bearing acreage. To learn more about the changes to the 2019 program, and how you can also apply for 2018 payments, the Almond Alliance of California and Almond Board of California are co-hosting workshops with local USDA Farm Service Agency offices.

Come learn about the program and how you can apply!

Chico, October 7, 2019 1:00 p.m. to 3:00 p.m. Manzanita Place at Chico Elks Lodge #423 1705 Manzanita Avenue Chico, CA 95926 RSVP: MFP-Chico@almondboard.com 209-343-3220 Seating is limited.

Fresno, October 11, 2019 9:30 to 11:30 a.m. Fresno County Farm Bureau 1274 W. Hedges Avenue, Fresno, CA 93728 RSVP: MFP-Fresno@almondboard.com 209-343-3220 Seating is limited.

Bakersfield October 15, 2019 9:30 to 11:30 a.m. UC Cooperative Extension Kern County 1031 S. Mt. Vernon Avenue, Bakersfield, CA 93307 RSVP: MFP-Bakersfield@almondboard.com 209-343-3220 Seating is limited.

Modesto, October 16, 2019 9:30 to 11:30 a.m. Almond Board Of California 1150 9th Street, Modesto CA 95354 (15th floor of Double Tree Hotel) RSVP MFP-Modesto@almondboard.com 209-343-3220 Seating is limited.

For more information contact Toni Arellano at 209.343.3220; tarellano@almondboard.com

California Ag Today2019-09-30T21:19:46-07:00October 2nd, 2019|

Produce Passes All Residue Testing in 2017

FDA Produce Residue Sampling “Once Again” Verifies Safety

Last week the Federal Food and Drug Administration (FDA) released its 2017 pesticide residue sampling data results. FDA concluded: “The latest set of results demonstrate once again that the majority of the foods we test are well below the federal limits set by the Environmental Protection Agency.”

Note the term “once again” in FDA’s statement. They used it because government residue sampling data year after year reaffirms the safety of our food and the exceptionally high level of compliance among farmers with laws and regulations covering the use of organic and conventional pesticides.

Let’s get a little technical for a moment and focus on how FDA residue sampling is protective of consumers. FDA employs a three-fold strategy to enforce the Environmental Protection Agency’s (EPA) tolerances or safety standards for pesticide residues.
If you haven’t heard – September is National Fruit and Vegetable month. Yes, it is time to celebrate the only food group health experts and nutritionists agree we should all eat more of every day for better health and a longer life.
While decades of studies have shown the nutritional benefits of fruits and vegetables are overwhelming and significant, the safety of both organic and conventional produce is also impressive. Government sampling data shows an over 99% compliance rate among farmers with the laws and regulations required for pesticide applications on organic and conventional fruit and vegetable crops. This led the United States Department of Agriculture to state that: “The U.S. food supply is among the safest in the world.”

Many health organizations are promoting National Fruit and Vegetable month to remind consumers about the importance of increasing consumption – only one in 10 of us eat enough of these nutrient-packed foods each day.

However, studies show a growing barrier to consumption is fear-based messaging which inaccurately calls into question the safety of the more affordable and accessible fruits and veggies. This messaging is predominantly carried by the same activist groups year after year despite studies which show that “prescriptions” for fruits and veggies could reduce health care costs by $40 billion annually. Or that 20,000 cancer cases could be prevented each year.

California Ag Today2019-09-23T15:06:22-07:00September 23rd, 2019|

Help APG Advocate for Funding to Fight NOW

American Pistachio Growers Asking Industry to Help Fund Phoenix Facility

American Pistachio Growers (APG) has been integrally involved in obtaining federally funding for the Center for Health Science & Technology Laboratory in Phoenix, AZ. The facility was originally commissioned by the cotton industry to raise sterile pink bollworm for area-wide releases in an effort to suppress the pest.

The program was even more successful than planned and the cotton industry was recently able to declare pink bollworm eradicated. Now that the facility has excess capacity, pistachio, almond, and walnut industry leaders have made a push to start breeding sterile navel orangeworm (NOW) for aerial release in California. Unfortunately, at the end of this Federal Fiscal Year, federal funding for the facility ends, and unless a new funding appropriation can be made by Congress, the facility will close.

Many pistachio growers have asked how they can help in APG’s efforts to obtain federal funding. With current efforts being focused on the U.S. Senate, growers are encouraged to write a letter to Senator Dianne Feinstein (CA) for her support. Sen. Feinstein sits on the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, & Related Agencies, which is where APG is advocating for funding.
Here is a sample letter that can be used, or you can draft your own letter that incorporates the following talking points:

Navel Orangeworm (NOW) is an invasive and destructive pest harmful to tree nuts (almonds, pistachios, and walnuts).
As much as $800 million lost each year from lost product and consumer confidence.
NOW is a major vector for aflatoxin, which results in shipment rejections and food safety concerns, hurting our trade position in key markets.
Growers spend $150-$450 per acre every year to apply currently available tools to control NOW in orchards totaling more than $500 million annually.
Congress & USDA can co-invest with tree nut industries by appropriating $21 million to develop a sterile insect technology (SIT) pilot program for NOW.
The Center for Health Science & Technology Laboratory in Phoenix, AZ is perfectly set up to take on the pilot project, but will be shut down at the end of September unless adequate funding is provided.

Letters can be faxed to 202-228-3954, emailed to joe_petrzelka@feinstein.senate.gov or mailed to:
Sen. Dianne Feinstein
303 Senate Hart Office Building
Washington, D.C. 20510

California Ag Today2021-05-12T11:05:01-07:00September 20th, 2019|

2018 Fresno County Crop Report a Record: $7.8 Billion!

Fresno County up BIG on Production Value for 2018

Submitted to Fresno County Board Supervisors by Milissa Cregan Fresno County Ag Commissioner

It is my pleasure to submit the 2018 Fresno County Agricultural Crop and Livestock Report. In each of our annual reports, the Department likes to highlight a segment of our history; and this edition will feature the California Department of Agriculture’s Direct Marketing Program and the certified producers and their crops.

This report is produced in accordance with Sections 2272 and 2279 of the California Food and Agriculture Code; and summarizes the acreage, production, and value of agricultural commodities produced in Fresno County. Fresno County’s total gross production value for 2018 is $7,887,583,790. This represents an increase of $859,559,690 or 12.23% over the previous year’s total of $7,028,024,100.

Once again, almonds continue to be the leading agricultural commodity in Fresno County with a gross value of $1,178,182,069, which represents 14.94% of the total gross value of all crops produced in 2018. The total gross value of grapes remained in the number two spot at $1,106,858,236 followed by pistachios for the first time at $862,144,401.

Fresno County’s agricultural strength is based on the diversity of crops produced. Included in the 2018 report are over 300 different commodities, 76 of which have a gross value in excess of $1,000,000. Although individual commodities may experience difficulties from year-to-year, Fresno County continues to supply the highest quality of food and fiber nation-wide and abroad to more than 95 countries around the world.

Crop values vary from year to year based on production, market fluctuations and weather. It is important to note the figures provided in this report reflect gross values and do not take into account the costs of production, marketing, transportation, or other ancillary costs. These figures do not represent net income or loss to the producers of these commodities.

This report is our yearly opportunity to recognize the growers, shippers, ranchers and other businesses instrumental to and supportive of agriculture in Fresno County. We truly appreciate the many producers, processors, and agencies (both private and public) that supported our e‑orts in completing this report. In addition, a hearty thank-you goes out to my entire staff, especially Fred Rinder, Scotti Walker, Angel Gibson, Rosemarie Davis, Sam Sohal, and Shoua VangXiong. Without their hard work and valuable input, this report would not be possible.

California Ag Today2019-09-11T18:03:57-07:00September 12th, 2019|

Generic Promotion of US Pistachios is Powerful

New Analysis Points to the Power of US Pistachio Industry’s Generic Program

American Pistachio Growers’ (APG) efforts to reduce or eliminate trade barriers in several key overseas markets have been a significant boon to pistachio exports and to growers’ bottom-line. A new study, “An Analysis of the Effects of the American Pistachio Growers’ Program to Reduce/Eliminate Tariffs on U.S. Pistachios,” has quantified, for the first time, the direct benefit to the U.S. pistachio industry from APG’s strategic program to vanquish trade barriers.

The analysis from Dr. Dennis H. Tootelian, an emeritus Professor of Marketing, sought to determine what shipments of U.S. pistachios would have been if tariffs had not been lowered or eliminated in Israel, Mexico, China and Hong Kong, and the European Union which are the export markets prioritized for focus by APG. Many of his analyses centered on the period from 2009 through 2017 — the period in which tariffs were reduced in all five geographic areas.

Tootelian’s study showed that actual shipments of U.S. pistachios after the tariffs were reduced or eliminated for each export market were more than 2.3 billion pounds greater than what would have been expected had the tariffs remained in place. Equated in economic terms, the boost in export volume after the trade barriers had been removed amounted to nearly $3 billion greater value than what would have been expected had the tariffs remained in effect.

While Tootelian did not have any prior expectations of what his study would show, he was surprised by the findings.

“To see this kind of an increase in shipments on a before and after basis with the tariffs did surprise me. I did not expect this kind of result in the marketplace. These are not small numbers,” Tootelian said. “What the data tell me is that there is latent demand for U.S. pistachios and once the tariffs come down, foreign markets want to buy them.”

Tootelian said the projected economic boon to U.S. growers is even more profound if the fluctuations in prices in China and Hong Kong were eliminated from the analysis.

“If you take the price fluctuations in China and Hong Kong out, the increase in value of pistachio shipments amounts to nearly $355 million more dollars per year — nearly $4.5 billion in total from the time when tariffs were in effect to after they were reduced or eliminated,” said Tootelian.

Data from the analysis estimated that more than 1.7 billion pounds of U.S. pistachios in total, or an average of more than 192 million pounds annually, may have gone into storage if they were not diverted to other markets. While the effect of the projected added supply on the world market is unknown in terms of lower prices, Tootelian said that it would surely have had a detrimental impact on U.S. growers.

“It is unknown what that would have done to the price,” he said. “In order to divert from storage and into other markets, prices probably would have had to come down considerably and whether they would have been able to market that much supply is an unknown.”

Underlying Tootelian’s analysis is the fact that price is not the sole determinant of the volume of U.S. pistachio exports. He said when tariffs are lowered or eliminated, traditional economics would dictate that increased shipments would lead to lower prices, but his data show demand for U.S. pistachios in some key markets remained high in the post-tariff era. Several factors, he said, appear to be in play.

“One is the reputation of U.S. pistachios, which carries a very positive market image with consumers and importers. Second, it could be the quality of the product is better or more consistent, or both, for what consumers can buy from other countries,” said Tootelian. “And third, there are a lot of reputable health studies that show nuts are healthy and nutritious. APG has invested considerable resources raising consumer awareness of the healthful attributes of pistachios, and consumers appear to be willing to pay a higher price. That is pretty clear from the data.”

APG has aggressively worked in the halls of Congress, with U.S. trade officials and with foreign governmental bodies to alleviate burdensome trade barriers and create a more open market for U.S-grown pistachios.

“Quantifying the value of APG’s efforts to growers has been difficult up to now, but this new study gives us some tangible answers to the importance of the work we are doing on behalf of the U.S. pistachio industry,” said Richard Matoian, APG’s executive director. “Frankly, we were quite surprised at the magnitude of these numbers. It’s our strong belief that whenever and wherever trade barriers exist to the free flow of American-grown pistachios around the world, we will confront them vigorously.”

In a postscript to his analysis, Tootelian added, “If I were a grower, I would be encouraging APG to be doing this more in other markets because the greater the demand there is for the product, the less goes into storage and that helps boost the price.”

California Ag Today2019-09-10T19:23:58-07:00September 11th, 2019|