30 Nov Will Pistachio Consumption Increase?
Vernon Crowder has released a Research and Advisory Note for Rabobank titled “U.S. Pistachios — Lots more to come.” In it, Crowder predicts rising consumer demand for pistachios but claims that market price may drop due to the expected larger crop.
Crowder says, “Pistachio growers in California and Arizona are expecting a record harvest in 2016, as a result of better growing conditions and maturing orchards. Exports of U.S. pistachios will again increase because of larger availability and a smaller harvest in Iran. The larger crop is expected to reduce the price growers receive. At the same time, lower prices for pistachios will also encourage more domestic sales. Yet, prices are projected to still be profitable for growers this year.”
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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.