Challenging season still delivers big pistachio crop

Challenging season still delivers big pistachio crop

The U.S. pistachio crop suffered through drought, insufficient chilling hours the previous winter and a host of other issues, but producers still managed to make a good crop.

Receipts reported by processors in December put the likely size of the 2014 U.S. pistachio crop at around 519.1 million pounds (in-shell). That’s far more than the 450-million pound crop many observers were expecting at one point last season.

However, it falls short of what it could have been, had not drought, insufficient chilling hours the previous winter, erratic leaf out, poor overlap of bloom, high levels of blank nuts and untimely hot temperatures during nut sizing intervened, says Jim Zion, managing partner of Meridian Growers, based in Clovis, Calif.

Nevertheless, in terms of quality, the crop finished in good shape.

“It looks great,” Zion says. “Insect damage was low, color was very good and uniform and kernel size, while not huge, was good and consistent.”

Meanwhile, prices for the 2014 crop have held strong, remaining higher than opening levels for the 2013 crop, he reports.

For example, although the wholesale price of in-shell pistachios has slipped some, they were still above the $5 per pound mark in late January. And, although more of the current crop remains to be sold, grower prices have been as good, if not better, in some cases, than the 2013 crop.

“I expect grower prices this year to be in the same range as last year,” says Zion, a member of the executive board of the American Pistachio Growers and past chairman of the APG Board of Directors. “These are among the highest we’ve ever seen. It’s still a good time to be a pistachio grower.”

A significant drop in navel orangeworm damage to the 2014 crop from the previous year is particularly encouraging, he notes.

This follows some complaints by European buyers of relatively high levels of NOW damage in shipments of 2013 crop pistachios they received. In at least one case, a consumer found a worm in a bag of pistachios.

“Navel orangeworm had gone from being a nuisance in the market to becoming a real problem,” Zion says.

The industry responded by assuring European buyers that California growers and processors were aware of the problem and taking steps to fix it, he explains. This included a letter to buyers from Bob Beede, retired University of California Cooperative Extension farm advisor, explaining the nature of the problem and the various steps growers take to prevent it.

Meanwhile, growers were also made aware of the situation.

“Every year, growers have continued to get better at controlling NOW,” Zion says. The 2014 product we’re shipping looks great and our customers are happy. In fact, one European buyer sent me a thank-you note, commenting on the improved quality of this year’s pistachios.”

One challenge facing the industry in marketing the new crop is the increasing strength of the U.S. dollar. In effect, this has made California pistachios about 13 percent more expensive for European food shoppers than last year, Zion said.

Meanwhile, China, the top overseas customer for California pistachios, has been buying fewer of the nuts this year, due to higher prices, a slowing economy and the later start of the Chinese New Year, when demand peaks for pistachios. This year, it begins Feb. 19, nearly three weeks later than in 2014.

“We were under huge pressure to ship as much product as we could before mid-November, 2013, to reach the market in time for the Chinese New Year festivities in 2014,” Zion says. “This year, buyers have had more time to line up supplies.”

In fact, interest from Chinese buyers began picking up in mid-January, he notes. “Before this marketing season ends, we hope to ship about the same amount of pistachios to China as last year,” Zion says.

If all factors favoring a good crop this year, including far-above average rainfall, adequate chilling hours, favorable temperatures and no insect damage come to pass, the acreage of producing pistachio trees has the potential to produce as many as 650 million pounds of pistachios, Zion says. At the opposite end, assuming the worst in terms of weather, pests and diseases, he doubts growers could produce much more than a 450-million-pound crop.

“If I had to make a guess this far in advance, I’d split the difference and put a realistic potential crop size at about 500 million to 550 million pounds this year,” Zion says. “We need that much just to keep up with demand. Much smaller than that and we risk giving up sales.”

Presumably, Iranian producers would take up the slack forgone sales. They and U.S. growers produce about 90 percent of the world’s pistachios.

Normally, Iran’s crop totals around 330 million to 350 million pounds. However, in 2014, production totaled about an estimated 440 million pounds. That’s likely to drop significantly this year, which should help keep prices firm, Zion notes.

“Producers there are facing some big water problems in terms of drought and major depletion of their groundwater supplies,” he says.

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