U.S. Pistachios -- Larger Crop Increasing Consumption?

Lower Prices Expected to Encourage Domestic Consumption While Keeping Growers Profitable, Says Rabobank Report

FRESNO, CA--(Marketwired - June 02, 2016) - The increasing popularity of pistachios and nuts in general, combined with the quality of U.S. crop have encouraged more demand domestically and globally. This is at the same time production has been increasing with the 2016/2017 crop being between 650 million lbs to 850 million lbs. This increased volume of product is expected to decrease prices for the crop year, though most growers are expected to continue to be profitable this year. This ongoing growth, supply and demand trend is examined in Rabobank's Food & Agribusiness Research and Advisory note titled "U.S. Pistachios -- Lots more to come."According to the note's author, Vernon Crowder, the growth of exports and market prices have demonstrated that there is still upward opportunity to grow demand. "Larger future harvest will require greater marketing efforts to continue to keep prices and sales volumes up," said Crowder. "This is not just a domestic issue, global competitors such as Iran will need to consider this as well." Globally, Iran is the other major producer of the nut. In 2015 their large crop in addition to a strengthening USD, had moved export shipments down 43 percent for the 12 months ending in April.The report concludes by highlighting the current acreage that is expected to come into production in next 5 years pushing the total U.S. pistachio harvest to over one billion pounds in that timeframe. "With that many nuts in the market, we are hearing a lot of industry partners indicate they see the average price for the next 10 years declining," said Crowder. "Even with this decline, we expect that most growers will remain profitable assuming they do not have excessive debt or production costs." The note concludes pointing out that the challenge for the industry will be for marketers to find a home for the larger crops, be it as a snack which accounts for 90 percent of sales today, or as ingredients.This report is the second of a series of research notes that Rabobank has planned to highlight the major tree nuts grown in the U.S. Research highlighting almonds was recently released with walnuts, hazelnuts, and pecans slated for release over the next few months.

The full report is available exclusively to clients of Rabobank and to the media upon request.

Source:Kolell@RaboAg.com