Strong demand from overseas buyers remains a key force behind increased sales of grown-in-America pistachios this year. As of May 15, industry shipments for the current marketing year totaled almost eight percent more than a year earlier, reports Jim Zion, managing partner of Meridian Nut Growers, Clovis, Calif., and chairman of the American Pistachio Growers.
“Exports are still the strength of our market,” he says, “Currently, they account for 65 percent of the U.S. pistachio crop.”
The single largest customer for American producers continues to be China, where consumers are buying close to one-third of all U.S. nuts sold. Another large market is Europe. There, the nuts are helping to satisfy a growing Russian appetite for the tasty kernels.
“As the Russian economy keeps expanding, the middle class is developing an affinity for U.S. pistachios,” Zion says. “We’ve seen a noticeable pick up in buying inquiries from traders there in the last year or so. Promotional activities by the American Pistachio Growers (APG) association and private brands in Western Europe are spilling over into Eastern Europe.”
With domestic sales remaining flat, Zion sees plenty of room to sell more pistachios to American consumers.
“There’s a huge number of people who still think of pistachios as a red-dyed product for the Christmas holidays,” he says.
He sees that changing as APG and private brands continue to promote the health benefits of pistachios. That includes marketing campaigns by one large processor, highlighting the nutritional value of pistachios during this year’s Super Bowl and current Major League Baseball season.
“Pistachio industry ambassadors, like the U.S. Water Polo Team and Jeremy Jones, extreme snowboarder, have been incredible spokespersons for the role of pistachio in maintaining health and fitness,” Zion says. “Consumers are starting to take notice. In fact, people in the food industry tell us that pistachios are the hot item for this year.”
Following recent years, when pistachio inventories worldwide declined as global demand out-paced production, demand and supply now are approaching equilibrium.
“The more pistachios consumers see and eat, the more people tend to buy them just because they are more available,” Zion says. “Our industry is getting to the point where we have enough production to meet current demands because we have the supply to fill it.”
Shadow on the market
Still, several factors could cast a shadow on the picture. For one thing, at this point in the season, no one knows how many pistachios will be available for the next marketing year, which begins Sept. 1. He’s heard guesses of 2013 crop ranging in size from smaller to larger than last year. Based on reports from his company’s growers, the crop now forming on the trees appears to be similar to, if not even a little larger, than last year, Zion says.
Meanwhile, processors are waiting to see how enactment of the Food Safety and Modernization Act will affect their operations. Also, any disruption in world trade channels could dampen American pistachio sales.
Then, there’s the low mountain snowpack and low rainfall this year that are causing significant cuts in surface water deliveries for irrigating orchards.
“The uncertain water situation is becoming a huge burden, not only on pistachio growers, but for all farmers in the state with permanent crops,” Zion says.
Other issues of concern for the industry this year include insect pressure as a result of the mild winter and early summer.
“Also, we have noticed the economic downturn in Europe and increasing signs of an economic slowdown in China, which could have adverse affects in these two important markets,” Zion says. “This just means we need to increase our efforts to promote American pistachios worldwide.
Right now, the world supply of pistachios – grown mainly in the U.S. Iran, Turkey, Syria, Afghanistan, and, increasingly, in Australia – exceeds 1 billion pounds. Zion expects that could double in the next decade, if not sooner.
“Our industry, which was once seen as small, has matured quite rapidly,” he says. “It’s been fun to see the growth we’ve achieved.”
This report is from Tree Nut Farm Press, a twice-monthly electronic newsletter published by Western Farm Press during the growing season. This edition was sponsored by DuPont Crop Protection. If you would like to receive Tree Nut Farm Press go to the Western Farm Press home page and sign up for it and other Farm Press electronic newsletters.
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