Pistachio Industry Poised to Market 2016 Record Crop11/17/2016
Members of California’s pistachio industry, who last year bemoaned a disastrously meager crop of just 275 million pounds, are now looking at the challenge of marketing a record crop this year likely to total about 830 million pounds.
“The silos are full,” said Bob Klein, manager of the California Pistachio Research Board and the Administrative Committee for Pistachios.
“It’s a record crop, and we definitely have enough supply to meet all demand. We need to sell a lot more nuts than we have in the past to make way for next year’s crop.”
Jim Zion, managing partner with Meridian Growers, is among those who will wrestle with this marketing challenge, but he doesn’t find this daunting. Instead, he said, “I think the first challenge will be the quality of the crop.”
Zion said there are a high percentage of closed shell nuts statewide – as much as 50 percent non-opened. Such a phenomenon is not uncommon with large crops.
Variable maturity was common this year, Zion said. Growers, who usually make at least two passes through an orchard, sometimes found themselves in situations where “they had to pull the trigger” and make a pass through the trees despite the maturity differential.
Zion said pistachio demand has been strong, in part since the Chinese New Year is in late January.
“We’re pushing to get as much product out as we can prior to Dec. 1. We’re maxed out on capacity to keep up with Chinese demand, and now Europe is starting to buy and pull heavily.”
He added, “We’ve seen price decreases, but it’s stabilizing. We may see firming of the market after the first of year.”
Zion expects heavy domestic demand as well.
“Current prices are very attractive. A buyer of 100,000 pounds may double the purchase amount this year.”
Zion said lower prices are also popping up at the retail level, and he expects high holiday demand.
The previous record California pistachio crop was 555 million pounds set in 2012.
“It has taken four years for us to get back to producing a record crop,” said Richard Matoian, executive director of American Pistachio Growers at Fresno.
Pistachios are an alternate bearing crop, meaning lighter crops that alternate with heavy ones.
“We expected an off crop last year, but not by that much,” Matoian said, “and we expected an on crop this year, but didn’t expect it to be this large.”
Like Zion, Matoian believes prices will moderate “and many consumers will come back” after a year when prices rose due to the small crop. Matoian says this could be particularly helpful in enticing users of pistachios as an ingredient.
“As we get larger crops, ingredient use will grow, given a stable supply and stable price,” he said.
Last year’s crop decline was tied to low chilling hours and a lack of water due to continued drought. This year, chilling hours were up, and there was a greater availability of water.
“We did have a little surface water this year,” said Tulare County pistachio grower Brian Watte. “There was probably adequate water this year.”
Last year, his crop was a fourth of normal at about 1,000 pounds per acre. This year, it was slightly less than 4,000 pounds per acre.
“Marketing will be a challenge, but prices have come down since last year and have probably bottomed out at $2.20 to $2.30 per pound back to the grower,” Watte said. “That’s quite a bit lower than last year when they were as high as $3.75 and $3.80.”
Watte’s harvest went smoothly, even with extra steps taken to prevent thefts of loads of pistachios, which happened last year. He delivered his crop to Horizon Processing in Tulare, which – like other processors – checked driver identifications and took photographs of every truck and driver.
Kevin Harman, owner of the Specialty Crop Co. which grows pistachios in Fresno, Madera, and Merced counties, echoed Zion’s concern about closed shell nuts, saying he encountered levels in some orchards between 25 and 30 percent.
While Herman said better chilling hours this year contributed to the bountiful harvest, he also said “the trees took a rest last year” and more bearing acreage came into production.
Herman is also bullish on the marketing picture.
“Fortunately, Iran has an off-year crop, and that will help us. We will have to pull out all the stops on marketing techniques.”
He said there have previously been “violently alternating yields industry-wide and now there will be a chance for stability, and that should give buyers confidence.”
Source: Dennis Pollock, Western Farm Press