U.S. Pistachios -- Larger Crop Increasing Consumption?
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.
About Rabobank, N.A.
Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With more than 100 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees.
Rabobank, N.A. is a division of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. www.rabobankamerica.com
About Rabo AgriFinance
As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that gives producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, input finance and effective risk management products. Rabo AgriFinance is a division of Rabobank, the premier bank to the global agriculture industry and one of the world's largest and safest banks.
About Rabobank Food & Agribusiness Research and Advisory (FAR)
The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients' business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers.
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