Follow us on: Facebook Twitter YouTube

Pistachio marketers prepare for larger future production

Issue Date: February 17, 2021
By Christine Souza
Sales of California-grown pistachios faced headwinds during 2020 from the pandemic and trade tariffs, but marketers say long-term demand trends remain positive.

After producing a record 1.05 billion-pound pistachio crop in 2020, farmers and those who promote the nut say marketing programs have been undertaken to grow demand as new orchards mature.

During a presentation to the virtual World Ag Expo last week, American Pistachio Growers President Richard Matoian predicted continued production increases, up to 1.4 billion pounds by 2024.

"Pistachios are a growing commodity in our state, and we hope to get even more consumers focused on pistachios," Matoian said.

Pistachios, like some other permanent crops, are alternate bearing, producing heavy crops one year and lighter crops the next. This coming year is an "off" year for pistachios, with American Pistachio Growers projecting production between 930 million and 1.3 billion pounds.

To help address variability in production from year to year, Matoian said newer pistachio varieties have been introduced, such as Golden Hills and Lost Hills.

Fresno County pistachio grower Steve Moore, who farms near Huron, said he planted the Golden Hills pistachio several years ago.

When asked if the variety reduces variability from one year to the next, he said, "We hope that's the case," adding, "There's so much to be learned from these new varieties, and it takes years to really get to know them and depend on them to where they set a trend."

Moore said the Golden Hills pistachio tends to have more in-shell split nuts, so they have to go through a process to have the shells opened and then are typically sold as kernels for baking and institutional purposes.

"You get the same amount of money, but we usually like to sell them along with the shell," he said.

"We try to build value into these happy little nuts so that we cover all of our input and processing expenses on a sustainable basis, realizing that there are a lot of unknowns in terms of regulations," Moore said.

Matoian reported on pistachio shipments to both domestic and export markets, which have been affected by business closures due to COVID-19 and increased trade tariffs.

"Domestic sales for the most recently completed year (2020) were near the record level of last year (2019) and have continued to increase when compared with the last four years, so a very positive trend in the United States overall," Matoian said. "With COVID, people are changing their work habits and they have also changed some of their buying habits."

The pandemic has also led to challenges such as being able to ship pistachios effectively to export markets. Noting that pistachios are the second-largest California farm export behind almonds, Matoian said pistachio growers depend heavily on export sales, accounting for 70% of the crop.

Export figures for last year, he said, show pistachio shipments decreased about 37% from the previous year, which had been a record. Shipments decreased to the European Union, for example, but looking over four years shows a general upward trend, Matoian said, adding, "I would suggest the lower amount sold most recently was due to the lower crop that we had available."

The same is true for many other countries where pistachios are exported, he said, which showed steady, multi-year increases in shipments until last year.

Despite China's implementation of tariffs on U.S. pistachio exports—a 55% tariff on raw product and a 30% tariff on roasted pistachios—Matoian reported "a significant increase in shipments to that part of the world" in 2018 and 2019. This was mostly due to a crop disaster in Iran, which meant buyers in China were looking for pistachios and could find supplies from the U.S.

"If Iran produces a large crop, they're going to take over markets that we used to dominate, and when they have a short crop, we will take some of those markets back," Matoian said.

Kern County pistachio farmer Michael Miya said he believes pistachios have a long way to go before reaching their full potential in foreign markets.

"With the amount of acres that are going to be coming into production, I think we'll be able to satisfy the demand internationally and domestically," Miya said, adding that he remains concerned about price as more acres are planted.

"I'm afraid that the same thing (will happen to pistachios) that happened to walnuts, where the price was high and so a lot of growers got into the walnut market and then all of a sudden, now the price is the lowest it's ever been in decades," Miya said. "I'm afraid that there's a lot of new pistachio acres being planted."

He said he also expects pistachio markets to be affected by "the water crisis that we're expecting—and you could call it a man-made water crisis." But, Miya noted, "Pistachios are probably the best nut crop to handle this, because you can deficit-irrigate a pistachio where you can't really do that in almonds and walnuts."

Regarding marketing of pistachios, Matoian said American Pistachio Growers has a new advertising campaign to promote the nuts, which are high in protein, adding that "you get a lot of pistachios for a very small amount of calories."

In 2019, according to the most recent data from the California Department of Food and Agriculture, pistachios ranked No. 6 among the state's top 10 commodities, with an on-farm value of $1.94 billion.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




Special Reports

Features

Series

Special Issues

Special Sections