Will the American pistachio industry produce a billion pounds of nuts this season? One industry leader says growers will have a better idea in October as harvest winds down.

Projections of upwards of 1.2 billion pounds of pistachios may sound realistic, but if there is one thing the industry is not good at, it is projecting crop size before the harvesters are fired up and moving.

American Pistachio Growers President Richard Matoian reported on the "good and the bad" of the industry by video after the association cancelled its annual summer meeting because of COVID restrictions and concerns. Through a handful of videos, the industry instead updated members on marketing efforts that were sidelined in March as news of COVID-19 forced governments around the world to lock down their economies.

Pricing

Matoian says pricing has been more positive for pistachio growers than it has the other U.S. tree nuts amidst contract prices and grower incentives paid by the processors. World demand for American-grown pistachios also held shipments through the end of June on par with last year's numbers, he said.

Jim Zion, managing partner with Meridian Growers, a grower and marketer of tree nuts, said pistachio prices have largely remained stable to growers as volatility has been more the norm for other tree nuts, namely almonds and walnuts.

What could be worrying are early reports of high levels of "blanking," or pistachios without developed nuts within the shells. Zion says growers are currently surveying their orchards for blanking levels. One farmer he talked with who typically sees 10-15 percent blanking was seeing 20-25 percent blanking in his counts.

Zion said poor chill hours and pollination in the early spring could have resulted in these high counts. This led Matoian to report in his APG message to members that the 1.2-billion-pound crop projection could now range between 900 million pounds and one billion pounds.

Marketing

In mixed news, shipments of pistachio kernels make up over one-fourth of domestic shipments. The good news: these shipments are up year-over-year, according to Matoian. The bad news: these products tend to wind up in food service and grocery stores, which were affected by restaurant and school lunch program closures in the wake of the COVID-19 pandemic.

Matoian says export markets have three forms of potential headwinds pushing against the U.S. industry as the industry could produce its largest crop ever. Market conditions surrounding the continued COVID closures or uncertainties, competition from Iran and Turkey, and Chinese tariffs weigh on the industry, he said.

America's largest competitor of pistachios remains Iran, which according to Zion can produce between 270 million pounds and 320 million pounds annually. Because Iran is constrained by water availability, it is unlikely the country can produce more pistachios than that, he said.

While U.S. shipments of pistachios to China are assessed a 55 percent tariff on raw product, and 40 percent on roasted nuts, Iran has no such tariff against its pistachios. Coupled with the lower prices Iran typically charges for its product, the U.S. is at a significant disadvantage with respect to pricing. Even so, Matoian is told by processors that some buyers still prefer U.S. pistachios over the lower-priced Iranian nuts for quality and food safety reasons.

Prior to COVID, shipments were increasing in Europe, the Middle East and India. With the recent shutdowns in India, and the likelihood that country could face a second national shutdown due to the pandemic, shipments of U.S. pistachios there have stopped.

Matoian is optimistic about Europe, even as shipments there are off somewhat. He sees opportunities to gain American market share in Europe because of the consistent high quality and food safety assurances that come with U.S.-grown pistachios.

"This is something consumers and buyers around the world are looking for," he said.

Complete Protein

Earlier this year the American Pistachio Growers hosted Dr. Oz at its annual convention. During his keynote presentation Dr. Oz touted the pistachio as a "complete protein" source. This announcement was timed with a world-wide press release from APG to that fact. The news, according to Judy Hirigoyan, global vice president of marketing for APG, was set to become a large facet of the organization's worldwide marketing push until the COVID pandemic shut down global travel and APG had to retool its marketing efforts.

"What should have been big news globally became a sidebar story because of the 24/7 all-COVID news cycle," she said.

Since then, Hirigoyan has watched the changing buying habits of consumers that became more intentional.

"People have never been so health focused and so intent on wanting to stay well," she said.

As APG scrapped its planned marketing efforts for the summer after the COVID restrictions were enacted, the trade group focused much of its marketing efforts on the complete protein announcement from early March. The announcement followed research revealing that pistachios contain all nine essential amino acids in adequate amounts for humans. This follows previous reports that soy and quinoa likewise are complete, plant-based protein sources for the human diet.

"Amino acids are the 20 building blocks of protein, but nine essential amino acids are not produced by the human body, so they must be obtained in food," said Dr. Arianna Carughi, science advisor to American Pistachio Growers.