Early U.S. pistachio exports currently shine amidst warnings of a global oversupply if demand cannot keep pace with projected supply growth.

Growers and industry leaders attending the upcoming American Pistachio Growers meeting in Monterey in late February can expect updates dissecting the reports on early season shipments.

David Magana, senior analyst with RaboResearch Food & Agribusiness, called the export numbers from the first four months of the marketing year a “good indication that the industry is doing a good job” marketing its record crop.

Magana pointed to a combination of the smaller U.S. ending stocks and the doubling of Chinese pistachio purchases, year-over-year, as “good news” for the U.S. industry. Chinese exports the first four months of the new marketing year exceeded 200 million pounds after recording just 79 million pounds in sales the same time last year.

Also positive in the news from China was the attraction of U.S. pistachios during the Chinese New Year celebration, he said. While Chinese consumers still like fresh cherries coming out of South America during the annual celebration, those fresh cherries come at a premium price, Magana said. U.S. pistachios are more of a staple for Chinese consumers during the celebration. Those U.S. nuts carry a known higher quality and improved food safety standards when compared to foreign sources of pistachios, he said.

Export growth to Germany and Spain over the same period was also up, Magana said. Exports to Germany were up more than three-fold to 35 million pounds, with Spanish exports up from 7 million to 13 million pounds.

Cautiously optimistic

The early season sales numbers of U.S. pistachios come as the industry was warned a few weeks earlier of a possible oversupply amidst the record 2023 crop and projections of larger crops in the next few years. The popularity of pistachios as farmers increased their planted acres over the past 20 years has seen a significant rise in bearing acres and production.

Industry experts, including those from University of California, pointed to the likelihood that U.S. pistachio production could reach two billion pounds in the next several years as bearing acreage climbs to over 600,000 by the end of the decade.

Magana said the low ending stocks carried forward from the last marketing year as the 2022 crop came in lighter than expected was helpful.

Just under 164 million pounds of unsold U.S. pistachios were carried into the current marketing year. This was 10.9% of the record 1.49 billion pounds of pistachios harvested by U.S. farmers in late 2023.

Brittney Goodrich, an Extension specialist in agricultural and resource economics with the University of California, warned growers at a meeting in mid-January that as global supplies continue to outpace demand. She said this could compound grower returns as the cost of production continues to rise.

Katherine Jarvis-Shean, an orchard systems advisor with the UC Ag and Natural Resources, cautioned farmers at the same meeting to consider promoting profitability practices over pure production gains to remain globally competitive.

Competition

Adding to the complexities of projecting global crop sizes, Goodrich told growers at California’s pistachio day symposium in January that as Iranian production remains somewhat flat, questions remain regarding Turkey’s production. Iran and Turkey are the second and third-largest pistachio producers globally, behind the United States.

Iran is said to have over 1.2 million acres of pistachios, a significant increase since 2008. Goodrich said Turkey’s reported numbers are up significantly as well, but questions remain about the legitimacy of the reported numbers she said were available publicly.

“For some reason, Turkey’s numbers tripled at some point, so I didn’t want to use the acreage numbers from that source because it seemed like there was something wrong,” Goodrich told growers in Visalia.

“We export a majority of our pistachios, so we’re really existing here in California in a global market,” she said.

As Turkey boosts its production, more of its crop is being exported. Until a few years ago, the U.S. pistachio industry reported that Turkey’s pistachio production was consumed domestically. Now more of those nuts are being shipped abroad.

Still, USDA data reported by Goodrich suggests the gap between world supply and demand has been flat at about 200,000 metric tons since 2016. Prior to that the gap was as low as about 100,000 metric tons, giving credence to Goodrich’s warnings that global production continues to outpace demand.

Information on the upcoming American Pistachio Growers conference is available online.