Baseline Projections Of Spanish Pistachio Production

Spanish pistachio production is on the verge of significant growth. A decade ago, Spain had less than 6,000 hectares (ha) dedicated to pistachio cultivation, but that number has soared to more than 70,000 ha in the last campaign. In 2022, Spain produced a mere 0.3% of global pistachios. However, this ranked Spain 7th globally, according to estimates by the International Nuts and Dried Fruit Council (INC). Production is set to triple over the next five to six years as newly planted areas come into production.

As of 2022, out of the 70,235 ha of land in Spain planted with pistachios, only 23,264 ha were productive. The trees in the remaining areas are still in their early stages and are not mature enough to yield nuts. Production in 2022 reached 19,889 metric tons (on an undried, in-shell basis), according to the Spanish Ministry of Agriculture, Fisheries and Food (MAFF).

Source: MAFF

Over the next four to five years, the remaining 46,971 ha of pistachio trees will gradually become productive, barring a small percentage of anticipated tree failures that will be removed. Of the areas that will become productive, 31,331 ha is dryland production, while the remaining 15,640 ha is under irrigation. By utilizing historical yields for dryland and irrigated pistachios respectively, and factoring in a four-year delay before trees start producing, along with the expected rise in yields as trees reach maturity, an accurate projection can be made for medium-term production. According to this baseline projection, production could top 60,000 mt (on an undried, in-shell basis) within the next five years.

Source: MAFF, Tridge

Large Difference in Production Estimates by MAFF and the INC

These baseline projections are based on the historical yields as reported by Spain’s MAFF. However, several important considerations need to be taken into account. First is that production is reported as undried pistachios in their shell. When pistachios are harvested, the moisture content is often 30-50% of the total weight, but pistachios are dried to moisture levels below 7% for storage. Harvest and processing losses also need to be considered. This has led to major differences in the production reported by Spain’s MAFF and other reporting authorities, for example, the INC or PistachioPro. Where Spain’s MAFF reported pistachio production of 19,889 mt in 2022, the INC pegged production at 3,000 mt. Using a similar methodology as applied by the INC to calculate production, baseline estimates would put production at 10,300 mt by 2027.

With the Spanish pistachio industry being very young, several other considerations will determine future production.

Slight Slowdown in New Plantings

From 2021 to 2022, the total area under pistachios increased by 9,004 ha. While this is a big number, it is lower than the three preceding years, which topped 10,000 ha respectively. 2022 was also a tough year for the nut industry, as prices were comparatively low, and input costs soared. This led to a further slowdown in the rate of new plantings. However, investment in pistachio plantations is set to continue as early indications point to success.

Alternate Bearing Cycle and Surprisingly Consistent Yields

Pistachio yields depend on a combination of factors. The variety of pistachio planted, whether or not trees are grafted, irrigation, fertilization, orchard management, and the alternate bearing cycle of pistachios all play a role in determining the production outlook. Based on historical production reported by the MAFF, yields have remained relatively consistent at a five-year average of 665 kg/ha for dryland and 1,370 kg/ha for irrigated production. The comparatively small fluctuations in yields are a testament to a modern pistachio industry, with standardized farming practices and improved varieties being planted.

Pistachios are notorious for being an alternate-bearing tree crop, where a year of high yields is followed by a year of low yields. However, production in Spain has been surprisingly consistent, increasing gradually in correlation with new trees coming into production. While not as pronounced as in other countries, 2022 was an off-year in terms of production, exacerbated by the persistent drought experienced over the Iberian peninsula. As a result, production in 2023 is expected to soar by 50% YoY. The on-and-off-year cycles might become more pronounced in the future. Frost damage, or another drought, could result in crop failure. As is the physiological cycle of pistachios. The period of rest that trees gain from a crop failure, will result in high production the following year, followed by lower production the year after, as trees expended high amounts of energy on the preceding crop.

Drought Resistance

Of the total 70,235 ha of pistachio areas of, 67% is dryland, and 33% is irrigated. One of the reasons for the popularity of pistachio trees is their comparative resistance to extreme temperatures and drought. More than 75% of the total area of pistachios is in the Castilla-La Mancha region, a semi-arid region, with rainfall in the main growing areas less than 500 millimeters per year. These trees fare well in these conditions despite the low rainfall. In 2022, one of the driest and hottest years on record, dryland yields still reached 628 kg/ha, a mere 6% below the five-year average. The drought and heat resistance of these trees might be tested, as climate change is leading to warmer temperatures over the Iberian peninsula.

Despite some anticipated challenges, the long-term forecast for Spain's production and demand of pistachios looks promising. While the United States is also experiencing a fast increase in production, competition in the market is intense. Spain needs to enhance its pistachio processing capacity in line with its growing production. Specifically, easy access to adequate drying facilities will be crucial.