Leaders of the American Pistachio Growers (APG) say that the U.S. commercial pistachio industry can sell crops expected to dramatically increase over the next few years as about 100,000 acres of planted trees shift from nonbearing to bearing.
The shift will create record-smashing pistachio production which must be sold in a timely manner in domestic and global markets. Jim Zion and Richard Matoian believe the industry is ready for the challenge.
“The American pistachio industry must increase shipments by 15 percent to 20 percent per year to keep ahead of the expected supply,” said Zion, APC board chair.
Zion addressed pistachio supply and demand during the 2012 APG Conference in San Diego. APG, based in Fresno, Calif., is an agricultural trade organization whose members last year grew, processed, and sold about 45 percent of the U.S. pistachio crop.
California farmers produce about 99 percent of the nation’s commercial pistachio crop with the balance grown in Arizona and New Mexico.
“We could see 1 billion pounds of American-grown pistachios produced as early as 2017,” Zion said.
In comparison, the California almond industry is poised to produce a 2-billion pound crop this year, weather permitting.
“We could see a total world pistachio supply of 2 billion pounds before the decade is over.”
Several years ago, the U.S. took the reins away from Iran as the world’s largest pistachio grower.
“Some may consider higher pistachio production as an insurmountable problem. I view it as a great opportunity,” Zion told the 650-plus crowd of producers, processors, marketers, and industry members.
Zion also serves as managing director with the Meridian Nut Company in Clovis, Calif.
With the 100,000 acres of additional bearing acreage, the question often asked is whether the U.S. pistachio industry has overplanted?
“I don’t think so,” said APG Executive Director Richard Matoian. “Our pistachio processors say they have the capacity, ability, and desire to market more.”
A substantial planting increase began about 2004, peaked in 2007, and then declined slightly, Matoian says. About 10,000 acres of pistachios are now planted annually. The 100,000-increase in bearing acres will significantly swing the pistachio industry to the next level
The leading California pistachio-producing counties, in order, are Kern, Fresno, Tulare, Madera, and Kings. Most of Arizona’s acreage is centered in Cochise County. New Mexico is just entering the production fold.
Higher U.S. pistachio output translates into the need for more aggressive marketing featuring American icons. The pistachio is now the official snack of the Miss California pageant and the U.S. Men’s and Women’s Olympic Water Polo teams.
2012 Miss California Noelle Freeman has joined U.S. pistachio growers in global promotional events. At the APG Convention, Freeman and Men’s Water Polo team members posed for photos with APG members.
Until last spring, the APG was known as the Western Pistachio Association. The name change is designed to improve the organization’s identity among international interests.
Pistachios a hot commodity
Today, U.S-grown tree nuts are a hot commodity overseas. Scientific studies have concluded that tree nuts are a heart-healthy snack with a wide range of other benefits. Last year, the APG established a scientific advisory panel to bring together nationally-known researchers to further research health benefits tied to the green nut.
Likely the world’s fastest growing hot spot for tree nut consumption is China, the world’s largest populated country. Many of its 1.3 billion residents are entering the middle class which translates into more available income for higher quality food including protein from nuts.
The Chinese and residents of India and other growing countries view tree nuts as essential to a healthy lifestyle — targeted messaging successfully delivered by the tree nut industry.
Matoian handed out kudos to the California almond industry which has blazed the trail for increased tree nut consumption overseas.
“We can look at the almond industry as an example of a commodity that produces more and more almonds every year and continues to open up new markets to get consumers to recognize the value, nutrition, and healthy aspects of their product. We believe we can do the same for pistachios.”
Besides targeting large, evolving cultures, the pistachio industry plans to dig a deeper foothold in the global food ingredient market. An estimated 40 percent to 60 percent of California walnuts and almonds are sold in this food market, Matoian says. Pistachios have less than a 10-percent market share.
“We have not really pushed this in the past since we haven’t had enough supplies of pistachios.”
Pistachio shipments overall have increased worldwide; despite the economic downturn in the U.S. and Europe. Domestic consumption has increased about 25 percent compared to the year earlier.
Pistachios are California’s No. 2 nut in farm gate value. According to the California Department of Food and Agriculture, California’s top tree crops in value are almonds at about $2.8 billion farm gate value; pistachios second at $1.16 billion; and closely followed by walnuts — $1 billion-plus (all 2010 figures).
Matoian says new trade opportunities can further expand sales of U.S. farm products, including opening more foreign ports for U.S tree nuts. The U.S.-Korea Free Trade Agreement, which took effect in March, will eliminate Korea’s import tariff; it was 30 percent before the agreement took effect. India’s tariff last year was lowered from 30 percent to 10 percent.
“I’m bullish for the pistachio industry based on how pistachios have been accepted in so many markets,” Matoian said. “We have great opportunities in front of us. We see the desire of our industry to put the dollars behind the effort.”
Zion says the positive health link with pistachios must play a vital role in creating demand ahead of supply to open doors for sales organizations.
“We continue to open up new markets for pistachios … We’ve brought our growers to the forefront of our messaging which allows consumers around the world to connect with the people who farm their food while building trust along the way.”
Zion closed by saying the pistachio marketing message is being heard loud and clear.
“Using pistachio growers and American icons through traditional and social media to carry the message of health, nutrition, fitness, and beauty is working. The bottom line is relationship building and we are very good at that.”