Most of the 2018 pistachio harvest is over, and the numbers are revealing a very good year for one of the world's most popular nuts. Through the end of Oct., 993.7 million pounds of pistachios were harvested, a new record year for U.S. growers.

"We're very pleased, considering some of the challenges early this year. We harvested just below 994 million pounds through the end of Oct., and we still have a few more nuts to count, but we have already surpassed the 2016 record 903 million pounds, so we did much higher than anyone expected at the beginning of the year," said American Pistachio Growers’ Executive Director Richard Matoian.

He said growers managed to do well, considering low chill hours and little rain in February this year that dampened hopes of a good crop. But as temperatures dropped in March and the rains became steadier, it helped the orchards to get off to a reasonably good start.

"So, what was going to be an average on-crop year for pistachios turned wonderfully into a record on-year crop harvest, and we feel very fortunate, and we may see a little greater boost in the final harvest as a few late growers still have some shaking on a few trees that could add to the total," he added.

The better-than-expected 2018 crop harvest has given new hope to pistachio growers who say they may well be on target for their first ever one-billion-pound harvest in the on-year of 2020. Provided there aren't any unforeseen obstacles and there is adequate water for orchards to flourish and the weather is favorable, Matoian says, optimism is justified if a new record-breaking year pans out when the new decade arrives.

One reason for that optimism is that growth in the nut industry, including pistachios, is strong with no visible signs of slowing. New orchards are being established and some existing orchards are expanding. Even in other Western states like Arizona and New Mexico the industry is experiencing some growth, and as trees mature there is great potential for larger harvests each season. He noted that Arizona alone may be doubling the number of bearing acres in the next 6 to 7 years. California, however, remains the largest producer of pistachios providing about 93 percent of the annual harvest.

Market Issues

In spite of another possible record year for pistachios in 2020 and a trend for continuing infrastructure growth and market demand, he warns that producing and marketing a good harvest of healthy nuts depends on other considerations, like global supply and demand, the availability of water, the world economy and trade issues.

"As we have seen this year, trade disputes and tariffs can play a significant role in global marketing, as can global supply and demand and the strength or weakness of the dollar and other world currencies. But that may not be our greatest concern."

Matoian says the bigger issue for most Western nut growers is water. While most pistachio growers received at or about 100 percent of their state and federal water allocations in 2018, the real question from year to year is how those allocations will change--they can, and they do change, he says, according to the availability of water each year. A 100 percent allocation may mean 12 inches or 24 inches of water, and "that's not enough to grow the crop."    

"In most every year, growers, if they have groundwater available, are pumping supplemental water out of the ground, which is more expensive, or in other years they are going to need to purchase water to grow a successful crop. Some growers have said, off-hand, depending upon where they are located of course, water has been 50-percent of their production budget."

Demand Growing

On the brighter side, Matoian said worldwide the demand for pistachios is growing, but that is tempered by the tariffs in China, which has become the number-one market for U.S. pistachios. China's demand has grown from about 5 million pounds to last year's 211 million pounds, a tremendous growth rate in such a short period of time.

Just how much the U.S.-China trade war and its exchange of tariffs has affected the U.S. nut industry largely remains to be seen. He said it depends a great deal on the availability of the product from another region, in this case Iran, which had a very short crop in 2018 because of a freeze. Iran only harvested about a third of their normal harvest numbers this year, which could mean a greater demand for U.S. pistachios because of the smaller supply. The other issue is whether buyers this year are looking for higher quality nuts like those produced in the U.S., or are they price conscious buyers looking to lower the cost of nuts to their consumers.

Matoian says time will tell when it comes to how damaging tariffs against U.S. goods will be, and there is certainly ample concern that additional tariffs as have been discussed by China could make the task of marketing to the U.S. grower’s largest global trade partner even more difficult. But for now, he says the growth of the healthy-nut snack industry is still promising and he is hopeful the demand for U.S. pistachios will continue to grow.