California Pistachios Are Set For Record Year

California Pistachios Make Comeback in 2016

 

By Brian German, Associate Broadcaster

California produces close to 99 percent of the nation’s pistachios. With harvest season just about wrapped up, growers are pleased with this year’s crop. 

Last year was a slow one for pistachios, with only 275 million pounds produced.  Because pistachios are alternate-bearing [tendency for an entire tree to produce a greater than average crop one year and a lower than average crop the following year], last year’s disappointing crop allowed the trees to rest before producing this year’s estimated record crop. 

Richard Matoian, executive director, American Pistachio Growers, estimated this year’s crop to be between 830 and 850 million pounds. The last record-setting crop was in 2012 when growers produced 555 million pounds of pistachios.  This year, some California growers have reported broken branches due to the heaviness of the crop, a phenominon Matoian has never seen before.  

Just as last year’s lower harvest enabled the pistachio trees to bounce back this year, increased rainfall last winter helped improve irrigation supplies for the nut trees this year. 

In addition, more chilling hours last winter also helped boost production.  Pistachio trees require cold nights, with at least 800 hours of temperatures below 19 degrees Fahrenheit.  This winter, trees experienced more than 1,000 hours of those conditions. 

Reports indicate that the pistachio crop from Iran, one of our biggest global competitors, is a bit down this year, which could help California growers get a better price for their pistachios.  “We all hope and try to keep the market as strong as it can be,” said Matoian, “but there are market forces at work. You can’t hold on to a crop forever. You have to be conscious of what the world supply is, and so a number of factors go into setting a price.”

Growers are pleased with the overall size of the harvest compared to last year, but they’re also a bit concerned about the prices. “The initial price the growers got last year was somewhere between $2 and about $2.20 per pound. Now we are at a $1.60 to about $1.80 per pound,” Matoian said.

TREE NUTS, EXCEPT PECANS, REMAIN STRONG IN EXPORTS

Tree Nuts, Still the 800-Pound Gorilla

Crash of the U.S. Pecan Market a Cautionary Tale, Says Rabobank

The export market for U.S. almonds, walnuts, pistachios and pecans continued to grow in 2012, reaching $6 billion dollars and accounting for over 60 percent of U.S. production. In its most recent report, “Riding The Growth Curve – Can U.S. Tree Nut Exports Continue to Defy Gravity?,” Rabobank questions whether this growth will continue. The author of the report, Karen Halliburton Barber, senior analyst, Produce for the Rabobank Food & Agribusiness Research and Advisory Group, says that it should, but that the industry shouldn’t rest on its laurels. “Assuming water limitations will not significantly restrict U.S. production, the U.S. tree nut sector still faces the fundamental uncertainty of when supply and demand will stabilize,” said Barber. “That said, the U.S. tree nut sector is in a good competitive position given its leadership in production and trading history.”In the report, Barber examines the main commodities making up the U.S. tree nut sector:
 
     Almonds – “Here, the U.S. is the 800-pound gorilla and accounts for over 78 percent of total global production. This is where the U.S. is clearly in a good competitive position but needs to beware of the oversupply spiral.”
     
     Pistachios – “Iran is slowing down, but they are not out. Water scarcity and weather have caused declines in production in recent years. However, new growth areas are cropping up and competition may heat up in the medium term.”
     
     Walnuts – “This is the only sector where the U.S. is not the predominant global supplier.  Although China is a net importer because of its large domestic demand,  its share of global production is greater than that of the U.S., providing competition for U.S. walnuts in the Chinese market. An added risk factor is that Chile has begun to compete with the U.S. on quality in key growth markets.”
     
     Pecans – “This segment is the cautionary tale of the report, warning of what could happen if the right factors line up at the same time. In 2012, the U.S. pecan market crashed. Now largely dependent on the global export market, U.S. pecans were hit with competitive pressures from South Africa, while at the same time dealing with lower yields because of weather challenges. The result of these factors was a 50 percent reduction in grower prices for pecans from July 2011 to January 2013.”

The report concludes by noting that the U.S. tree nut sector’s overdependence on the Chinese market poses the greatest challenge. Yet, U.S. producers are poised for growth over the longer term—both in China and globally. The strategy employed by the almond, walnut and pistachio industries of  a more balanced buyer/supplier parity approach can help continue to moderate the risk.