The pistachio marketing year starts on September 1st, which is when the harvest kicks off. The Administrative Committee for Pistachios (ACP) releases monthly shipment reports for US pistachios. Included in these reports are domestic shipments and exports shipments, as well as total marketable inventory calculation. Detailed export shipments are reported to all export destinations. Pistachios are sold as:
While shelling stock is mostly earmarked for being shelled and sold as kernels, any of the categories can be shelled and sold as kernels as demand requires. Due to the different ways in which pistachios are sold, consolidating the data from these categories into a standardized unit of measure is not always possible. However, comparing monthly shipment reports from previous seasons to the 2021/22 season gives a clear picture of the shifting supply and demand of US pistachios.
The 2021 crop was a record 529,544 mt (1,166,783,184 lbs), and production has been increasing for the better part of a century. Pistachios are an alternate bearing crop, meaning that every second year is an on-year with high yields, followed by an off-year with low yield. 2021, which was supposed to be an off-year, had the second-highest yield on record, and combined with an ever-increasing area under pistachios made for a record crop.
Given the anticipation that it would be an off-year, most market players held large inventory when the season began. On 1 September 2021, the season started with a record 128,828 mt carry over from the 2020/21 season. This is nearly double the 65,349 mt with which the 2020/21 season started. All-in-all it means that the 2021/22 season has 658,071 mt of pistachios available to be sold. Also, as 2022 is an on-year, there will be less incentive to keep a large carry-over inventory by the end of this season.
From the start of the marketing year to the end of December, 38,034 mt was shipped domestically. This was the highest volume on record and was in line with expectations since the crop is also the highest on record. Domestic shipments have increased yearly in line with the increase in pistachio production in the US, with a CAGR of 11% between 2017 and 2020.
Source: APC, Tridge
Export shipments are much more volatile than domestic shipments. With pistachios being an alternate bearing crop, prices often reflect the anticipated higher or lower production in the subsequent year, which boosts or deters exports. Production in other key players in the pistachio industry also determines the demand for US pistachios. The 2021/22 season started off with a bang, as large carry-in and somewhat unexpected record production meant a lot of pistachios were available. Export shipments for the first four months were a record 99,717 mt, but this is in line with the record crop and large carry-in. However, in December exports sank, which will be concerning given the oversupply of pistachios.
California harbors have struggled to clear the logistical backlog caused by Covid-19. The ongoing supply chain crisis caused Californian exports to drop by an estimated value of USD 2.1 billion between May and September. This is still an ongoing issue early in 2022 and is one of the reasons the exports of pistachio and many other products are lagging. The freefalling Turkish lira has also made pistachios from Turkey cheaper. Turkey is normally not a large exporter of pistachios but is sitting on large carry-over inventory from last season which is being marketed.
Source: Giannini Foundation of Agricultural Economics, University of California
Of the total marketable inventory, which is carry-in plus production, only 21% has been sold in the first 4 months of the 2021/22 MY. This is the lowest on record and well below the average for the preceding 4 years of 28%. Marketable inventory as of the end of December was an incredible 450,411 mt. When using the last 5 seasons as a benchmark, it seems the US is having a hard time selling all the pistachios coming to the market.
Source: ACP, Tridge
Looking forward surging production might become an even larger concern if demand does not increase in tandem. Pistachio plantings have been booming since 2012. In California, where 99% of the US pistachios crop is grown, production could increase by another 25% within the next 3 to 6 years. In 2021, the area under nut-bearing pistachios trees was 408,776 acres, with 111,129 acres reported “not bearing”, but for the most part it means “not bearing yet”. Additionally, another 34,388 acres were newly planted. On the positive side, global demand for nearly all commodities has been booming since the latter parts of 2021, and the logistic disruptions that tainted exports this season might just be a once-off issue.