The epic drought in California caused a top state pistachio leader this spring to uncharacteristically eat his own words. He would have rather chomped down on a snack pack of the little green nuts.
After predicting two years ago that the U.S. pistachio crop would achieve the one-billion-pound production mark as early as 2018, American Pistachio Growers (APG) Executive Director Richard Matoian modified his prediction during his address at the 7th annual APG annual conference held in February in Coronado, Calif.
“Due to the California drought, achieving a one-billion-pound pistachio crop may be a few more years out,” Matoian said. “Whether the industry reaches that level by 2018 will depend on a lot of factors – water availability is the most important.
He also pinned the disappointing news on some plantings which may not achieve expected yields on marginal ground. Yet despite smaller crops in the near term, the APG leader says grower prices should remain strong.
“This is good news for pistachio growers who have producing acres,” Matoian said.
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California growers produce about 99 percent of the nation’s pistachio crop with the balance grown in Arizona and New Mexico.
A drought-caused short crop is expected for other commodities grown in California. Only Mother Nature knows how long the drought will last.
After the drought discussion, Matoian discussed the successes for the pistachio industry and the APG through last year. APG is a trade organization comprised of growers in the tri-state producing area plus member processors.
With just over 300,000 acres (bearing and non-bearing) in California, bearing ground totals about 215,000 acres in the Central Valley – from Merced County in the north to Kern County in the south.
Even with current water shortages, Matoian predicts bearing pistachio acreage should break the 300,000 acre barrier by 2020. At the turn of the century (2000), bearing acreage totaled about 75,000 acres.
“The number of bearing acres has increased dramatically and will continue to increase over the next 4-6 number years.
The largest pistachio tree plantings in recent years occurred from 2006-2008. About 25,000 acres were planted in 2007, and again last year. Matoian predicts about 14,500 acres of new plantings this year – a large reduction due largely to the drought.
Pistachios are an alternate bearing crop in most growing areas. 2014 is an on year for most California growers.
Export sales skyrocket
Worldwide, U.S. pistachio sales are skyrocketing as the result of intense marketing campaigns by pistachio organizations, including the Paramount Farms’ Get Crackin’ campaign and the APG’s The Power of Pistachios campaign.
Matoian tipped his hat to APG marketing director Judy Hirigoyen for efforts to create strong green nut demand which has resulted in record sales.
Our goal is to market pistachios ahead of anticipated production,” Matoian said.
During the APG’s current fiscal year, about 80 percent ($9 million) of the APG budget is earmarked for global pistachio marketing. In 2007-2008, the association’s marketing budget was 31 percent ($443,000) of the total budget.
“Every year this organization makes a commitment to spend more and more to market larger crops,” said Matoian.
The balance of the association’s coffers is spent on lobbying at the state and federal levels, member services and communications, and administration.
The APG is funded by voluntary grower-member assessments of 2.5 cents per pound. In addition, APG member processors pay 1.5 cents on all pounds processed through the facilities.
Sales of U.S. pistachios have skyrocketed from near 100 million pounds in the 2005-2006 marketing year to about 280 million pounds in the 2012-2013 marketing year – an impressive 207 percent increase in seven years or almost 30 percent annually.
U.S. pistachio shipments to China and Hong Kong during the same period soared nearly 3,000 percent. In the first five months of the current crop year (Sept. 1 – Jan. 31), total exports increased 6.6 percent. Sales to China and Hong Kong catapulted 14.5 percent while exports to Asia rose 6.6 percent.
Until recently, Western Europe was a stable but flat market for U.S. pistachios. Sales have climbed almost 20 percent in the last year and a half.
Matoian says, “These increases are a continuing positive trend in pistachio exports.”
Closer to home, U.S. shipments to domestic markets have increased 72 percent in the last seven years. Combined domestic and international shipments have increased 139 percent since the 2005-2006 crop year.
“This growth is unparalleled growth compared to any other commodity,” Matoian said. “At the same time, grower returns continue to increase year after year.”
Pistachio third top nut
Recent cash register receipt data from InfoScan suggest that pistachios are the third largest packaged nut sold in U.S. grocery stores - behind almonds and peanuts respectively.
Last December, the data showed consumers spent more than $800 million on almonds at the grocery store. Peanuts rang up about $780 million at registers. Pistachio product sales snared about $700 million from buyers’ pocketbooks.
Matoian chimed, “Pistachios are doing very, very well.”
Retiring three-year APG Board Chairman Jim Zion echoed Matoian’s concern about water – calling it “front and center” on the association’s radar screen.
“Water and its availability remains a top priority for all growers in the western U.S.,” Zion said. “APG will remain a vital source of information for the media and legislators, and an advocate for water policies that benefit our members and the entire agricultural industry.”
On the processing side, Zion said APG-member processors processed 47 percent of the 2013 California pistachio crop.
Zion handed the gavel to incoming APG Chairman Thomas Dille of Lincoln, Calif. Dille, a pistachio grower and marketer, is the general manager of Little Creek Farms, Inc. and Fiddyment Farms, both in Lincoln.