Yield is robust in ‘off’ year for pistachios
California pistachio orchards are teeming with activity as growers harvest this year’s crop. It is expected to reach or exceed 1 billion pounds, just under last year’s record 1.05 billion pounds.
Pistachios are alternate bearing, producing heavy crop yields one year and lighter yields the next. This year is technically an “off” year for the crop.
“Based upon everything that we’re hearing as a result of harvest and the size of the crop, it looks like we’re going to get close to— if not possibly exceed— a billion pounds again,” said American Pistachio Growers President Richard Matoian. “What that means for next year is we should have another ‘on’ year and be well above a billion.”
With a production value of $2.87 billion in 2020, pistachios rank No. 4 among the state’s top agricultural commodities, behind milk, almonds and grapes.
Drought-tolerant pistachios have thrived in the San Joaquin Valley due to the region’s fertile soil; hot, dry climate; and moderately cold winters. About 97% of the state’s pistachio are grown from Merced County to Kern County, with newer plantings in Northern California, Matoian said.
Farmer Erik Herman, whose family business is based in Madera but also grows in Fresno and Merced counties, said he is pleased with results from Golden Hills pistachios this year. The variety was developed to help address variability in production from year to year.
“The Golden Hills variety, which is harvested starting in September, had huge yields,” Herman said. “But for the Kerman variety, it’s obviously an off year. Some ranches are doing OK and others, we’re starting to see more blanking and closed shells.”
Herman said about 75% of growers farm the traditional Kerman variety and in the past six or seven years have planted Golden Hills.
From 2016-2020, California pistachio growers added 173,540 acres, an increase of 56%, according to a 2020 economic impact study by The Tootelian Company. The study said more than 485,000 bearing and nonbearing acres of pistachios were grown in 2020, making California the dominant force in U.S. pistachio production with 99% of the nation’s supply.
“By 2024, the pistachio crop is expected to reach 500,000 bearing acres and increase to 1.4 billion pounds,” Matoian said.
Farmers are planting more pistachios, Matoian said, because they are drought tolerant and there is increased global demand, particularly in Europe and China/Hong Kong.
“Increased demand is causing grower returns to remain economically viable, and that’s being fueled by the recognition of pistachios being a healthy, good-for-you snack, and also fueled by the lack of worldwide production,” Matoian said.
The U.S. is the world’s No. 1 pistachio producer, followed by Iran, Turkey and Syria. Between 65% to 70% of U.S. pistachios are exported. On the worldwide market, Matoian said, there is a shortage of pistachios. Iranian growers experienced a freeze, which severely reduced production. In Turkey—the world’s third-largest pistachio producer—this is an off year.
“The outlook for the near term appears to be positive,” Matoian said. “But it’s going to be evermore important to continue to build demand for our product, both domestically and internationally.”
Despite China’s implementation of tariffs on U.S. pistachio exports—50% on raw nuts and 30% on roasted—2020 shipments to Asia significantly increased, according to trade observers. China represents over 95% of Asia consumption. This is according to an update released in September by Primex, a Wascobased exporter of pistachios.
Supply-chain backlogs are affecting export shipments. Matoian explained challenges include difficulties obtaining, loading and delivering containers. Other issues are ocean vessels that bypass waiting product containers and continue without loading.
“Shipping is a huge part of the problem, but also trucking is a part of the problem. Even if we find vessel bookings, then we don’t have enough trucking capacity, so we’re constantly looking,” said Ali Amin, president of Primex, who added that work for his logistics team has tripled. “Waiting time for vessels is very unreliable. Timing of picking up containers is last minute or not precise, or sometimes they change the schedule. Sometimes you lose your booking. Sometimes there is not enough time to arrange the trucking.”
Amin said Chinese pistachio customers are concerned about whether they will receive the nuts in time for Chinese New Year, so they’re being a bit more cautious in ordering. European customers, he said, were more proactive in booking shipments early.
Supply-chain backlogs have also impacted the ability of farmers to source needed supplies.
“If we want to get a new pickup truck for the foreman, it’s like pulling your hair out to just get a basic truck,” Herman said. “It’s much harder to source supplies. I’m calling every single day on certain things, so you be more proactive when ordering. Just because they are around today doesn’t mean they’re going to be around tomorrow.”
Despite the challenges, Herman said this year’s crop is very clean and of good quality, although nut size is slightly smaller. He said he foresees water restrictions, such as balancing groundwater required by the Sustainable Groundwater Management Act, means more trees will be uprooted. He said adoption of technology to increase efficiency is key.
“Farmers are having to introduce more innovation and technology,” Herman said. “I’m very optimistic, because there’s a lot of good technologies out there to help make things simpler and help farmers be more efficient.”