While problems swirl around almost everything grown in California, there is a positive vibe that hangs over the pistachio industry.
The latest shipment report from the Administrative Committee for Pistachios, coordinators of that nut variety's marketing order since 2004, shows April to be another strong shipping month for American pistachios.
Overall shipments were more than 26% ahead of last year based on strong domestic shipments while year-to-date shipments are at 12% ahead of last year for the same period.
Current estimates range from 850 to 950 million pounds even in an “off” year as new acreage comes into production to offset some of the normal decrease. Market activity has been impressive following the news of a freeze that devastated Iran’s crop with damage estimates as high as 50% in some growing regions.
If the crop comes in closer to the 850 million mark, expectations are that prices will remain firm during the second and third quarters. If the higher predictions closer to one billion pounds appear more accurate, prices may decrease minimally approaching the fourth quarter.
All of which may be why California pistachio orchard purchase considerations are outpacing other tree nuts. Pricing for pistachio properties, which require less water than almonds or walnuts, continues to rise, especially in the southern San Joaquin Valley.
Janie Gatzman is a grower/processor near Oakdale where she also appraises nut crop holdings. As a member of the California Chapter, American Society of Farm Managers and Rural Appraisers, she also co-edits the California/Nevada Trends in Agricultural Land and Lease Values report recently released for 2021.
“There’s a substantial degree of buying, selling, and leasing going on in California tree nut country,” she said, noting that pistachio purchases as a long-term investment are soaring.
Although much of her appraisal work centers around Fresno, Kings, Madera, and Yolo counties, she monitors pistachio orchard purchases all over California as part of her Trends report work.
“Overall there has been very high demand for pistachio properties throughout California’s central valley where prices increased throughout 2020 and continue upward into 2021,” she said, defining “high demand” as “multiple offers above asking prices.”
Price per acre varies
Determining an average-price-per-acre range varies widely based on things like total orchard size, location, and availability of water, but the published 2020 range went from $17,000 to $40,000 per acre. “Today, it’s higher than that,” Gatzman said, “Probably in the low twenties to the mid-fifties. The low end of the range is going to be older orchards panted in the 1970’s and early 1980’s while the higher range involves anything planted from 1995 on.
“Pistachios are the most profitable nut crop being grown in California right now and the driving force for the increase in property value is the profitability of the crop,” she said. “Continued profitability should bring continued stability in the current price range although restricted water supply going forward could change things and push prices higher as the industry gets impacted by more drought and SIGMA taking effect. A lot of money is being pushed towards smaller properties that have good water.
“With Iran having such severe production problems, California is in a strong market position to control the worldwide price. Pistachios are a desert-type tree that don’t require fancy soils or a lot of water, so California (and Arizona) hold promise for the future.”
Larger institutional entities with bigger pocketbooks and who can afford to be in the game for the long are buying properties and planning new pistachio orchards for future crops. “They like the fact that pistachios require less water than other tree nuts, water that can be higher salt and lower quality, especially as you go south into larger properties,” she said.