West Coast Nut September 2019

Pistachio Prices
Hinge on Export
Expectations
By DAVID MAGAÑA | Ph.D., Senior Horticulture Analyst for Rabo AgriFinance
OFF AND ON. THAT RHYTHM IS THE
cadence for pistachio yields. On and
on is what exports need to be. Last year
two-thirds of U.S. pistachios crossed borders
or sailed oceans. California producers have
planted pistachio trees at a faster rate than
any other tree nut variety over the last decade.
Watching production grow, the RaboResearch
team developed a supply-and-demand analytical
tool to help growers anticipate prices levels
for the next five years.
thousand acres
Figure 1. Baseline US Pistachio Acreage, 2008/09-2024/25e.
300
200
100
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
Source: CPC, ACP, CASS, APG, Rabobank 2019
2014/15
2015/16
2016/17
Bearing
2017/18
2018/19
Non-Bearing
2019/20e
2020/21e
2021/22e
2022/23e
2023/24e
2024/25e
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farm operation.
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Supply Growth is Set to Continue
Pistachio bearing acreage grew more than twofold over the
last decade, making pistachios California’s fastest-growing tree
nut in terms of acreage. From 2024, bearing acreage will sit at
about 370,000 acres—roughly a 40 percent increase (Figure 1).
Industry estimates show that average pistachio net returns per
acre exceed those obtained in competing nuts, creating incentives
for new plantings.
A relevant proportion of pistachio’s planted acreage is
located in the Southern San Joaquin Valley, a water-challenged
area. The Sustainable Groundwater Management Act (SGMA)
will limit future growth. For this reason, estimates indicate
that non-bearing acres will remain stagnant for a few years and
then decline by the end of the projection period. Yet bearing
acres will be at record-breaking levels every year for the next
several years.
After reaching a record crop in 2018, pistachio production
in California is set to continue to grow. Rabo AgriFinance’s
market outlook, based on its pistachio supply-and-demand
analytical tool, predicts that the 2019 crop will be the
third-largest on record, while the 2020 crop should break the
one-billion pound barrier. Moreover, pistachio production
should reach new record levels in 2022 and 2024, as those are
expected to be “on” years. Average yields will likely increase
over the projected period as more trees reach maturity and full
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West Coast Nut September 2019