Written by Edward Smith
Pistachios remained one of the top crops in the four-county aggregate crop report, moving up from sixth highest-valued commodity across the Central Valley to the fifth for 2017. Though the average production per acre across Fresno, Madera, Kings and Tulare counties decreased .37 tons per acre to 1.25, total reported acreage increased 16,440 acres to 226,585. With the exception of Kings County, all counties saw an increase in acreage. In Tulare County, 4,000 additional acres became bearing and in Fresno County, there was an increase of 7,924 reported acres.
This increase in yield coupled with a mixed overall change in price meant a more competitive crop exported to a growing demand worldwide, even amidst an ongoing trade battle between the U.S. and China. And with internal problems facing Iran, the United States’ biggest competitor in the pistachio market, this could mean a more long-term investment for nut farmers.
“We have seen prices generally rise on pistachios, and dips with larger size crops, but generally, they’ve done pretty well,” said Richard Matoian, executive director for Fresno-based American Pistachio Growers.
The most remarkable climb in price was in Fresno County, where in 2016, a ton of pistachios sold on average for $1,746, according to the 2017 Fresno County Agricultural Commissioners’ crop report. In 2017, that same amount sold for $4,273, a 144 percent annual increase. That meant the nut’s total value increased $263,863,000, a 104-percent increase in Fresno County. Other counties’ prices were far more moderate, with Kings County decreasing $250 to $4,050, Madera County increasing $414 to $4,399 and Tulare County decreasing $580 to $3,780.
The county’s crop reports do rely on self-reporting from growers that admittedly, according to Fred Rinder, Fresno County deputy ag commissioner, sometimes results in farmers giving net value as opposed to gross value. This does, however, follow the trend of an increased value for the crop, in which all counties, except Kings County, saw an overall value increase.
The most immediate factor affecting pistachio growers is the ongoing trade dispute with China. In the latest round, China announced a 65-percent tariff on the nut, “which has definitely affected buyers’ willingness to purchase pistachios,” said Jim Zion, a managing partner with Meridian Growers, LLC, a grower-owned sales and marketing company in Fresno.
For an importer who consumes a quarter of all nuts grown in the United States, the results of a trade war with China could be devastating.
The biggest time of year for the nut is during Chinese New Year, said Zion, and that means product needs to shipped by mid-December in order to be on store shelves ready for purchase.
Of the entire production, about 65-70 percent is exported worldwide, according to Matoian, and of that, 50 percent is dedicated to China.
Of the 200 million pounds they plan to ship to China this year, a worst-case scenario would be a 35-40 percent decrease in consumption, according to Zion.
The commodity’s marketability, however, may be buoyed by a number of other factors.
The first is in Iran, the U.S.’ biggest competitor in the pistachio market, who had a “disastrous” crop, said Zion.
Dwindling water supplies, a frost this year and desertification have impacted that nation’s ability to produce and export their crop while still making a profit, according to Matoian.
While Iran has an edge in terms of proximity to the market, a lack of water and salt intrusion caused an estimated loss of 20,000 hectares a year, according to the Financial Tribune, an Iranian-based economic think tank.
One hectare is equivalent to about 2.47 acres.
Iran produced 649,000 tons of the nut between March 2017 and March of this year, of which they exported more than 131,000 tons.
“If you think California has water problems, they have major water issues they’re not going to solve overnight,” Zion said of Iran.
This shrinking competition means consumers abroad have fewer options besides the Central Valley. Estimates have it that 50 percent of shipments may be lost, according to Matoian, whereas other crops may be facing up to 100-percent loss because of the availability from growers in other parts of the world.
As the trade disputes go on however, more markets begin to emerge. Pistachio exports from South America, Australia and Spain are on the rise, according to Zion. In Turkey, it also looks like they had a decent crop as well, though it’s hard to get numbers from the country, he said.
Despite these trade disputes, pistachios are hearty plants, said Zion. Trees have been known to live well past 100 years and beyond the ongoing trade battle. A tree in Syria is said to be over a 1,000 years old.
“They used to say you plant almonds for your grandchildren,” said Zion. “But you plant pistachios for your great-grandchildren.