What is in this article?:
- California tree nut crops on fast track
- China, China, China
- Tree nut markets are a “major reason” land prices in Central California have shot to $22,000 for open farmland to almost $30,000 for an established pistachio orchard in Kern County.
- China has been the economic driver for the nut industry worldwide.
- Potential potholes in the tree nut superhighway include food safety issues, a strengthening dollar and the ever-present threat of the U.S. trading away overseas markets for U.S. commodities in exchange for a diplomatic or military concession.
The California tree nut industry is going nuts.
Record grower prices and shipments have everyone smiling like a freshly harvested pistachio.
Jim Zion, managing director of Meridian Nut Co., Clovis, Calif., told a packed audience at the Spring Ag Outlook conference in Visalia, Calif., that the growing almond, pistachio and walnut markets are a “major reason” land prices in Central California have skyrocketed to up to $22,000 for open farmland in irrigation districts with good water contracts to almost $30,000 for an established pistachio orchard in Kern County.
These prices are from the California chapter of the American Society of Farm Managers and Rural Appraisers, which sponsors the Spring Ag Outlook forum each year.
Zion, who is also chairman of the American Pistachio Growers, said pistachios are so profitable to growers that prices can come down 50 cents per pound from what they are today, and growers would still be making a gain.
Facts like that are seducing more growers to plant increasingly more pistachios to the point that pistachio production will soon reach 1 billion pounds, likely by 2017, according to Zion. That will almost double the latest record crop of 2011 (528 million pounds). Not a bad track record for a crop that was only commercialized in the U.S. for the first time in 1976.
(For more, see: Pistachio industry poised to sell record crops)
Zion would not hazard an estimate on the 2012 crop. It is still a bit early in the season. However, prominent Kern County pistachio grower Carl Fanucchi, Fanucchi Diversified Management, Inc., Bakersfield, Calif., said in a recent edition of Tree Nut Farm Press, “Most growers are expecting up to a 600-million pound crop this year.” That compares to the 448-million pound crop in 2011, an off year for alternate bearing pistachios.
Zion can only hope when the pistachio production hits 1 billion pounds, the rest of the story will be like the almond industry when it hit that mark. It was 2002, and more than a few industry observers predicted the collapse of the almond market from oversupply.
The naysayers were dead wrong. Since then, growers have delivered more than 1 billion pounds annually to processors in nine out of the last 10 years, and prices have been good each season as demand has grown steadily. Almond prices continue to attract new plantings. Final deliveries for the 2011 crop are expected to total almost 2 billion pounds and shipments so far indicate that the crop will move to market at good prices.
Meridian is one of the larger tree nut marketing organizations in the state with more than $100 million in annual sales for 40 million pounds of tree nuts.
(For more, see: Internet power boosts Western tree nut sales)
All California tree nut crops are heavily dependent on exports. Exports represent 65 percent of the U.S. pistachio crop. California is the largest pistachio producing state with Arizona and New Mexico coming in second and third.
“The challenge in the pistachio industry is to increase shipments 15 to 20 percent per year,” for the foreseeable future. That is what it will require to move the additional crop from new plantings and new varieties that have gone into the ground in recent years.