Pistachio sector seeks markets to absorb bigger future crops

California pistachio growers are searching the globe for potential emerging markets to handle anticipated record-shattering crops in the coming years.

A market outlook for the surging pistachio sector was offered at the American Pistachio Growers annual conference last week in Monterey.

Pistachio shipments to Europe, Asia, Canada and Mexico allowed the sector to avoid overproduction with a 2023 crop that approached 1.5 billion pounds.

Since pistachios are alternate-bearing—producing a light crop one year and a heavy crop the next—2024 is considered an “off” year for the crop and will be down slightly from the 2023 figure.

However, in five years, leaders in the pistachio business said they expect annual crop production to increase to several billion pounds due to the number of nonbearing acres expected to come into production.

Bob Klein, manager of the California Pistachio Research Board, said pistachio acres in California nearly doubled between 1990 and 2000. Since then, he said, “we doubled again each of the next two decades.”

Klein estimated the state has more than 600,000 total acres of pistachios.

“We can’t keep doubling acreage forever,” Klein said. “We have 140,000 acres of nonbearing pistachios that will come on in the next five years.”

While the acreage has expanded, growers have also planted pistachio varieties that are more productive.

Before 2011, the standard variety was Kerman, which produces 3,100 pounds per acre in heavy-bearing years but only 2,200 pounds per acre in light-bearing years. Since 2011, growers have planted the Golden Hills variety, which yields 3,500 pounds per acre in heavy years and only drops to 3,300 pounds an acre in the light years.

“We will have almost 2 billion pounds in 2027,” Klein said. “Over the next five years, we will have 8 billion pounds and we have to move it globally.”

Wesley Wilson, director for member services and communications for American Pistachio Growers, said 72% of state pistachio shipments are exports. Of those, 22% are shipped to Europe, 20% to China, Hong Kong and Vietnam and 15% to customers in the Middle East and Africa.

Domestic shipments declined 1.5% last year, so growers banked on the 197% increase in exports to absorb the record-setting 2023 crop. Shipments to China increased 156% and to Europe by 102% in 2023. China remains a major market for pistachios, but the growth rate of this market is anticipated to slow.

“China is moving from a shift from an agricultural to an industrial economy, to a slower shift to a more modern economy,” said Marci Rossell, an economic forecaster and former co-host of “Squawk Box,” a CNBC cable news program. “China’s population has peaked and has begun a slow decline like Japan in the 1980s. India is the next China.”

The industry began marketing pistachios in India several years ago, and shipments to the country are significant.

“In 2020, we introduced India and shipped over 40 million pounds of pistachios to India last year,” Wilson said. “Their middle class is larger than the entire population of the United States.”

Technology could make the transition to an industrial economy faster and smoother in India, Rossell said.

“There are 790 million cellphone users and a general acceptance of computer technology in India,” Rossell said. “Artificial intelligence will make accounting, computing and consulting services cheaper. It can also make education more efficient.”

Technological advances such as AI make India a prime marketing target as American Pistachio Growers directs nutrition research money to publicize the health benefits of pistachios with consumers in major current and potential markets.

“We have a lot of experts in the areas we are marketing to,” said Scott Fryer, vice president of global marketing for American Pistachio Growers. “We orient our nutrition research toward consumer trends.”

As the pistachio industry focuses its research on nutrition, it also tries to communicate in ways that resonate with younger-generation customers.

“Older people read newspapers and watch cable television,” said Jimmy Szczepanek, managing director of Ketchum’s Food, Beverage and Cultivate industry group. “TikTok is the No. 1 source of information about food for Generation Z.”

Pistachio leaders sounded confident that they can meet the challenge to expand global markets for larger crops in the future.

“With about 100,000 nonbearing acres, we can and should expect a 2 billion-pound crop within the next seven years,” said Ali Amin, marketing communications committee chairman for the California Pistachio Export Council.

Amin, founder of Primex International, a trading company dedicated to processing, promoting and exporting pistachios, said council members “will continue to be vigilant and monitor the export markets, while supporting American Pistachio Growers and the industry in increasing demand in existing markets, as well as opening new markets.”

California’s pistachio sector, which had 53,700 bearing acres in 1990, compared to 453,750 in 2023, ranks among the state’s top 10 agricultural commodities, valued at $3 billion.

“Pistachios contribute more to the economy than the total gross domestic product of 51 countries,” Fryer said.

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