Export growth boosts demand for pistachios
By Christine Souza
Zack Raven, grower services manager at Keenan Farms in Avenal, shows a portion of this season’s pistachio crop.
Zack Raven of Keenan Farms conducts a routine quality check of pistachios at an orchard in Avenal.
As pistachios are harvested, they drop onto the harvester, travel along a conveyer, go into bins and then directly into the truck and never touching the ground.
Harvesters are now busy shaking trees throughout California to gather the 2012 pistachio crop, and growers predict harvest will continue through late October or early November.
Zack Raven, grower services manager at Keenan Farms in Avenal, said harvest is moving along strong and steady, and said this is an "on" year for most of the pistachio crop, which tends to bear heavier crops in alternating years.
"The crop looks healthy this season, but was delayed slightly due to a cool spring. The pistachios matured uniformly and are coming off nicely, making it unlikely that a second shake will be needed," Raven said. "Overall, the crop appearance is very good and yields vary slightly from grower to grower, but the crop size should result in a record yield statewide."
American Pistachio Growers Executive Director Richard Matoian estimated that U.S. pistachio growers will produce a record crop of between 550 million and 575 million pounds. More than 95 percent of U.S. pistachios are grown in California.
Jim Zion of Meridian Nut Growers in Clovis said although the pistachios are smaller than what he saw with last year's crop, he remains positive about 2012.
"It is a good time to be in the nut business generally, because almonds are going up price-wise, pistachios are up, walnut prices are up, the pecan market looks like it is going back up—it is going to be another good year for the California nut industry," said Zion, executive board chairman of American Pistachio Growers. "If we end up with a 600 million pound crop, we still probably won't have enough product to meet demand. Everybody's looking for pistachios. I wish I had more."
Keenan Farms was one of the earliest in the state to begin growing pistachios back in the early 1970s and during the years has evolved into a vertically integrated business growing, processing, marketing and distributing pistachios domestically and overseas. Raven said the company is able to receive and process pistachios quickly when harvest is in full swing.
"The pistachio industry has developed tremendously in California in just around 40 years. We've seen rapid response to food safety changes and our growers continue to be some of the most progressive leaders in farming today," Raven said. "It's estimated this year we'll see a record crop, which will likely continue as we move into the next 10 years of production."
A recent study commissioned by APG projects the crop will reach 1 billion pounds by 2018-2020.
"We know, based upon the acres of trees in the ground, what is going to come into production in seven years, so we can predict these things with some certainty," Matoian said. "Looking at 2004 and previous, there was an average of about 3,700 acres planted per year from 2005 to the present. The average is now 10,000 acres per year."
A relatively young commodity compared to other crops grown in California, pistachios are becoming a consumer favorite domestically and around the globe, he said.
As California growers continue with harvest, American Pistachio Growers and others promote the nut domestically and in foreign markets.
"As consumers become increasingly aware of the nutritional power of pistachios, I see a growing global demand for the nut as a snack food of choice," Raven said. "Upwards of 60 percent of the crop is exported, which helps balance trade and build domestic output."
Matoian said his organization's main focus is on export shipments, which he said grew from 100 million pounds to 275 million pounds during the past eight years.
"Our growth really has been in China and Hong Kong. In 2003-04, we shipped about half a million pounds to China, and this year it looks like it is around 110 million pounds if not above that," Matoian said. "The export market has been where the tremendous amount of growth is, and that has helped take up this new supply that is coming in."
Gross returns to the grower, Matoian said, have been pretty steady, at around $5,000 per acre. In 2010, when pistachio growers experienced one of the largest crops ever at 521 million pounds, growers grossed more than $8,000 per acre.
An increased global demand for pistachios, Raven said, means a good price for growers.
"We've heard again and again in the last several months that our export markets are anxious to begin shipment of the new crop. The demand is there, domestic and abroad. I expect our growers to receive another strong price this year," Raven said. "As consumers realize the nutritional benefits of eating pistachios, the industry anticipates a healthy demand for the nut worldwide. We've seen strong demand and had the second-lowest inventory carryover in the past five years."
Keenan Farms on average sells about 50 percent of its product domestically and 50 to the export market. The U.S., Raven said, is the largest consumer of California pistachios, followed by Asia, the European Union, the Middle East/Africa and Canada.
"The majority of our customers are purchasing pistachios as a snack item. Internationally, we also see several companies looking to pistachios as a mix-in snack ingredient. Although the vast majority of pistachios are purchased as inshell, we've seen growing demand for kernels as well," Raven said.
(Christine Souza is an assistant editor of Ag Alert. She may be contacted at firstname.lastname@example.org.)
Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.