Rich Kreps has just been announced as the new American Pistachio Growers Chairman of the Board. Watch this brief interview to learn more about Rich and what to expect at the 2024 American Pistachio Growers annual conference coming soon to Monterey, including some special keynote speakers. Learn more and register to attend the conference HERE.
Category: Pistachios
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Mitchell Keenan Promoted to Vice President of Keenan Farms
Keenan Farms, Inc. is pleased to announce the promotion of Mitchell Keenan to Vice President of Keenan Farms. In his new capacity, Mitchell’s role will be expanded to overseeing all operations of the company, with particular emphasis on export sales.
Since graduating from Fresno State with a degree in Agricultural Business, Mitchell has worked diligently at Keenan Farms, gaining experience in domestic and export sales, farming operations, processing, and project management including Keenan Farms’ latest plant expansion project.
“I am thrilled to have Mitchell in this leadership role at Keenan Farms,” said Robert Keenan, President of Keenan Farms. “Mitchell has proven himself to be a detailed, thoughtful, and talented manager. His work ethic and contributions to our team have been beneficial to the company, and I look forward to working with Mitchell to expand and position Keenan Farms for growth in our domestic and export markets.”
The company has invested heavily in advanced processing and sorting technology in addition to expanding capacity over the last few years.
“I’m excited to continue my family’s legacy of producing pistachios here in the valley,” said Mitchell. “With our increased capacity and enhanced plant technology, we’re able to serve our customers the best quality pistachios on the market. I’m grateful for my team at Keenan Farms and for this opportunity to take on more responsibility at the company.”
Keenan Farms is a family-owned pistachio processing and farming company based in Kettleman City, California. Since 1972, three generations of Keenans have been producing the highest quality pistachios in the industry. They offer a wide range of pistachio products, including inshell, no-shell, flavored, and bulk pistachios.
More information on the story of Keenan Farms is available at www.keenanfarms.com.
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Introducing American Pistachio Growers New VP of Global Marketing
American Pistachio Growers (APG) has a new Vice President of Global Marketing. Watch this brief interview introducing Scott Fryer to the pistachio industry, and come hear from him at their Pistachio Industry Conference, Feb. 26-28th to see what APG is doing to build demand for American grown pistachios.
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Leadership Transition Planned for Administrative Committee for Pistachios
The Administrative Committee for Pistachios (ACP) is pleased to announce the hiring of Stephen Vasquez as the Executive Director of the ACP starting January 2024. Vasquez will succeed Bob Klein who has served in the lead staff role since June 2007. Klein plans to retire in April 2024 to ensure a smooth transition. Management of the California Pistachio Research Board will also be part of Vasquez’s responsibilities, working closely with scientist focused on improving pistachio production. Vasquez most recently worked for Sun-Maid Growers as their technical viticulturist where he coordinated their research program and worked closely with growers and researchers to improve raisin production. His past experience also includes working for University of California Cooperative Extension as a viticulture farm advisor for 14 years, a research agronomist for an international fertilizer company and a director of agronomy for a large table grape farming company.
“We are excited to have Stephen join ACP and know that his experience will benefit the organization and pistachio growers,” Said Klein. “His experience as a farm advisor and farmer will bring a unique perspective to the ACP, which will help identify gaps in research that growers rely on to be successful in California.”
Vasquez will work with federal, state and local organizations to carry out the mission of the Administrative Committee for Pistachios. He is a lifelong resident of California and resides in Fresno CA with his wife.
Of the retiring Bob Klein, Pacific Nut Producer Editor Matthew Malcolm shared, “It has been a real privilege working with Bob for so many years in his dedicated service to the California pistachio industry. I will miss our great interviews together, but congratulate him on a job well done and wish him the best in retirement.”
ABOUT THE APC: The Administrative Committee for Pistachios (ACP) was established in 2004 by pistachio growers to regulate quality aspects of domestically shipped pistachios, primarily testing for levels of aflatoxin which can occur in tree nuts, peanuts, corn and other commodities. It is authorized to require inspection of domestically shipped pistachios for aflatoxin levels, gather statistics from handlers and report this data, fund research projects that pertain to the processing and handling of pistachios, and to establish food safety regulations. The pistachio marketing order does not perform marketing activities (advertising and consumer education) and does not sell or arrange the purchase of pistachios. The Administrative Committee for Pistachios (ACP) locally administers the federal marketing order for pistachios produced in California, Arizona, and New Mexico. To learn more visit: https://acpistachios.org/.
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New Invasive Pest Threatens Western Tree Nut Industry
Western tree nut commodities just got through a very tough season, and markets are still less than ideal. The last thing growers want to hear about is a new pest threatening their orchard production. But the Carpophilus Beetle has already been under the radar far too long, damaging Central Valley orchards under the guise of “Navel Orangeworm.” Watch this brief video with Bob Klein from the California Pistachio Research Board as he explains, and read more about this new pest in the December and January issues of Pacific Nut Producer magazine.
Please thank this video’s sponsor Thunder Creek Equipment for their industry support.
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American Pistachio Growers Awarded $5 Million Healthy Soils Grant
American Pistachio Growers (APG) has been awarded a $5 million grant from the California Department of Food and Agriculture (CDFA) to help growers adopt healthy soils practices in the Golden State. The grant is a part of the California Healthy Soils Initiative, a collaboration of state agencies and departments that promotes the development of healthy soils on California’s farmlands and ranchlands.
The grant to APG is among 14 grants funded through the CDFA Healthy Soils Block Grant Pilot Program, which awarded $62 million in soils block grants in 2023 to various organizations. The program will fund projects for three years, with a limit of $200,000 per project over the lifetime of the grant. The objective is to better connect farmers and ranchers with programs that encourage and incentivize the implementation of management practices that sequester carbon, reduce atmospheric greenhouse gases, and improve overall soil health.
“As the non-profit trade association for the pistachio industry, American Pistachio Growers is uniquely positioned to assist growers in implementing and managing various Healthy Soils Block Grant qualified projects,” said Wes Wilson, APG Director of Member Services and Communications. “We look forward to connecting growers with these valuable programs that will not only improve the overall health of our California soils, but have the potential to reduce greenhouse gas emissions and sequester carbon, all while increasing yields and reducing traditional inputs.”
The agreement with the CDFA Office of Environ mental Farming and Innovation (OEFI) was executed on December 5, 2023, with grower applications opening January 1, 2024. APG anticipates funding more than 30 projects, with special consideration given to growers who qualify as Socially Disadvantaged Farmers and Ranchers or have farms of 500 acres or less.
APG will conduct outreach and accept applications from growers in Kern, Tulare, Kings, Fresno, Madera and Merced counties. Under the program, qualifying practices include compost application, cover crop planting and management, mulching, hedgerow planting, nutrient management that results in a 15% or greater reduction in fertilizer application, residue and tillage management, and prescribed grazing.
“Our pistachio growers are true innovators and conservationists, and this grant will bring even greater awareness to the importance of healthy soils in our pistachio orchards,” added Wilson. “It’s a benefit not only for growers but also for all Californians.”
Growers who have questions or need additional information can contact Wilson at (559) 289-9375, wwilson@americanpistachios.org, or Carlee Branco at (559) 410-7482, cbranco@americanpistachios.org.
American Pistachio Growers is the non-profit trade association representing more than 865 growers and member processors in California, Arizona, New Mexico and Texas.
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Scott Fryer Joins American Pistachio Growers as VP of Global Marketing
Scott Fryer, with more than a decade of experience in the food marketing sector, has joined American Pistachio Growers as Vice President of Global Marketing. Fryer will lead APG’s initiatives to expand consumption of American-grown pistachios in the U.S. and abroad.
Before joining APG, Fryer served five years as Marketing Innovation Director for Sun-Maid Growers in Fresno where he directed the innovation and base business marketing efforts. He brings to APG a strong track record of successfully marketing an array of products. For seven years in his prior career at WhiteWave Foods in Broomfield, CO, he expanded several businesses including International Delight Coffee Creamer, Stok Cold Brew Coffee, and So Delicious Dairy Free.
“I am excited to join American Pistachio Growers and help drive demand for pistachios across the world,” Fryer said. “American pistachios are an incredibly heathy and nutritious snack, and if we can make consumers aware of the benefits, I have no doubt that they will love them as much as my family and I do.”
Richard Matoian, APG President, said the addition of Fryer to the APG team is timely as the pistachio industry is coming off a successful 2023 harvest season and growers and processors are eyeing increased pistachio crops looming in the future.
“We welcome Scott to the APG family and look forward to his contributions to the pistachio industry,” said Matoian. “Our industry has incredible opportunities to expand consumption of pistachios in the years ahead, especially in overseas markets. Scott will play a pivotal role in helping to fuel demand in our key markets.”
Fryer earned a B.A. at Brigham Young University and an MBA from Purdue University’s Daniels School of Business. Scott and his wife, Elly, have four children. Among his off-duty pursuits are travel, sports and enjoying the outdoors with his family.
American Pistachio Growers is the non-profit trade association representing more than 865 growers and member processors in California, Arizona, New Mexico and Texas.
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Turkey Expects Lower Pistachio & Hazelnut Crop This Year
The “off-year” for production will push Turkey’s pistachio production lower in Marketing Year (MY) 2023/24. The production of almonds and walnuts is forecast slightly higher but hazelnut production is expected to go down. Even though domestic tree nuts production continues to grow, Turkey is projected to import sizeable volumes of almonds and walnuts in MY 2023/24 to meet steady consumer demand. Imports of U.S. tree nuts continue to be disadvantaged by a 10 percent retaliatory duty, which Turkey imposed after the United States levied Section 232 tariffs on Turkish steel and aluminum. However, despite this additional tax and growing competition, the United States is still the one of the top suppliers of walnuts and almonds to Turkey.
Pistachio Production
Turkey’s pistachio production in Marketing Year (MY) 2023/24 is forecast at 160,000 metric tons (MT). Production volumes will decrease compared to the previous MY since MY 2023/24 is considered an “off-year” in the production cycle for pistachios. Still, production will not be as low as some of the earlier off-years. Production will be buoyed by an increase in the number of bearing trees. According to the Turkish Statistical Institute (TurkStat), there were an estimated 58 million bearing pistachio trees at the beginning of the current marketing year, up nearly 5 percent from last year. There are also about 25 million non-bearing trees, which is about 7 percent higher than a year ago.
A few large earthquakes in February 2023 struck the two largest pistachio producing provinces, Sanliurfa and Gaziantep. The Government of Turkiye (GoT) and market resources indicate that the earthquake had minimal effect on pistachio production in the area, though.
MY 2023/24 pistachio production, which is mostly rain-fed, will also benefit from improved rainfall conditions during the 2023 spring. However, there were two large floods in March 2023 in Sanliurfa which adversely affected some pistachio trees. Sanliurfa also saw some frost over a few nights in April and May 2023. Farmers tried to protect their orchards by making big bonfires. According to market sources, this method protects some of the fruits from freezing, though not all of them. Since the effects of these adverse events is limited in area, the effect on total production is minimal.
Pistachio growers continue to replace their older trees, some of which are more than 50 years old, with younger trees in hopes of improving yields and increasing profit margins. Younger trees are less affected by the periodicity. Market sources also indicate that planting of the Siirt variety, known to be less periodical, is also increasing, though the Antep variety is still dominant in Turkey.
With improved farmer training over the last decade, growers now appreciate and understand the importance of planting male trees in their orchards. At the same time, market sources report that in recent years some farmers, who were looking for higher profit margins, stopped planting lentils, barley, and even wheat to start growing pistachio trees. The new trees and orchards being planted will help lift Turkey’s overall yields and production levels in the coming years.
Pistachio yields and production levels can vary dramatically between on- and off-years. The average pistachio yield is around 4 kilograms (kg) per tree in on-years and around 2 kg per tree during off-years. However, periodicity effects on yield have decreased in recent years due to the reasons explained above.
Pistachio production is widespread throughout Turkey, with 56 of 81 provinces growing pistachios, according to the Gaziantep Commodity Exchange (GCE). However, the two southeastern provinces of Gaziantep and Sanliurfa account for 80 percent of total production. The southeastern provinces of Adiyaman, Siirt, Kilis, Kahramanmaras, Mardin, and Diyarbakir account for another 15 percent of total production. The remaining five percent is thinly spread across the Aegean, Mediterranean, and Marmara regions, where production has slowly increased over the last decade.
There are two main types of pistachios grown in Turkey, the Gaziantep (Antep) variety and the Siirt variety. Both are unique to Turkey and differ in size and shape compared to the pistachios grown in Iran and the USA. The Antep variety accounts for 85 percent of pistachios grown in Turkey. The Siirt variety makes up the remaining 15 percent of production; the Siirt variety is considered a higher- yielding variety than the Gaziantep variety.
The quality standards for Turkish pistachios are directly related to the size of the nut. 90 nuts or fewer per 100 grams is considered first quality; 90-100 nuts are second quality; 100-120 nuts are third quality; and more than 120 nuts are fourth quality. Turkey’s production of high-quality pistachios is predicted to increase in the future with the increasing number of new trees.
In recent years, to mitigate the natural “off year/on year” production cycle, pistachio growers have started using good agricultural practices, especially in parts of southeastern Turkey. With support from local universities and other institutions, farmers are gradually realizing that higher yields can be achieved with “good” soil conditions, better tree care, and irrigation. While the number of irrigated orchards has grown in the last few years due to abnormal drought conditions, only a fraction of total production is irrigated.
Since 2011, the Turkish Foundation for Combating Soil Erosion, Forestation, and Protection of Natural Habitats (TEMA), with contributions from private companies, has undertaken a project to increase the pistachio yields in the Gaziantep and Sanliurfa provinces. The project, which is called “May you have abundant pistachios,” trains farmers how to properly care for their trees. The training focuses on improving pruning and trimming techniques, as well as better fertilizer and pesticide application practices. Farmers who have been trained under this program and applied these best practices have seen their yields triple. Meanwhile, universities in the major pistachio growing regions in Turkey have developed better production methods and plant protection measures to help farmers improve yields.
Almond Production
Almond production for MY 2023/24 is forecast to increase year-over-year to 24,000 MT. This projected increase is attributed to an increase in the number of bearing trees.
The devastating earthquakes of February 2023 in the southeast region of Turkey affected Adiyaman and 10 other provinces. Adiyaman province is the largest almond growing region in Turkey, Kahta being the leading area of production. Market sources confirm the GoT’s assessment that almond production was not affected by the earthquake. Although there was a problem related to human resources in the immediate aftermath of the quakes due to evacuations, by the harvest these challenges were reduced, if not totally solved.
In March 2023 there were heavy rains and floods also affecting Adiyaman. Sources indicate that there was some frost and hail in April and May which hindered yields this year in the localities where those weather patterns occurred.
In line with past practice, the Chambers of Agriculture in Adiyaman and Kahta continue to press Turkey’s Agricultural Credit Cooperative Union (ACCU) to fix a higher purchase price for almonds and to set it earlier in the season. As of mid-September, though, ACCU has not yet set a purchasing price. Private traders use the ACCU purchase price as a benchmark in setting contract prices. The president of the Kahta Almond Producers Union indicated that a price needs to be announced and asked GoT to raise the customs tariffs, as he claims they have been gradually lowered in recent years. In August, the president of the Kahta Chamber of Agriculture declared that the purchase prices to be declared by ACCU should be a minimum of 50 – 55 TL/kg for inshell almonds, although that number was about 30 TL/kg in the previous harvest.
Almond growers continue to plant new trees and break ground on new orchards in response to strong domestic demand for almonds and with support from the GoT’s various support programs. The GoT encourages producers to establish new orchards by allocating free land for 49-years, providing interest- free financing, and delivering general support payments to farmers. In 2020, the Turkish Ministry of Agriculture and Forestry (MinAF) published an investor guide on its website to assist investors looking to plant new almond orchards. (Note: the guide was taken down from MinAF’s website a year after publication.) The guide explained the technical and financial aspects of starting a 100-hectare orchard. The guide noted that a return on investment was to be expected after seven years.
As a result of the aforementioned government support programs, and the attractive nature of the investment, the private sector has concentrated on planting new almond orchards in Izmir, Manisa, Mugla, Denizli, Sanliurfa, Canakkale, Adiyaman and Karaman provinces. The investments in new orchards, once fully realized, will increase almond production in the medium term.
The district of Kahta within the Adiyaman province has been the leading producer of almonds in Turkey since 2016, according to the Kahta Union of Almond Producers. The group’s plan is to increase almond orchard acreage to 100,000 ha by 2023/24 in order to produce enough almonds to meet domestic demand. According to the Kahta Chamber of Agriculture, the district will reach its acreage goal as of MY 2022/23, though many of the newly established orchards still have large numbers of non-bearing trees. As for the Union’s production target, it seems unreachable for the time being.
In earlier decades, MinAF has instituted special afforestation projects aimed at increasing the number of planted almond trees. While the number of planted trees has increased as a result of these projects, almond production has not significantly increased, since the trees were planted in marginal areas and were not carefully tended.
Walnut Production
For MY 2022/23, walnut production is forecast at 69,000 MT, slightly up from the previous year. Although the number of bearing trees increased, there have been droughts throughout the country from fall 2022 to spring 2023, and again in summer 2023. Spring 2023 saw excess rainfall, causing floods in several areas. There was also frost and hail damage seen in several areas of the country. Under the circumstances, production has remained stable.
Walnut trees grow in almost every province of the country, but commercial walnut orchards are still a relatively new phenomenon in Turkey. The GoT has instituted various programs to increase commercial production, allocating free land for 49-years, providing interest-free financing, and delivering general support payments to farmers. This support has spurred farmers and others in the private sector over the last couple of decades to open new orchards throughout the country, including the Aegean, Marmara, southeastern Anatolia, and Mediterranean regions. However, even with these new orchards, the domestic production of walnuts is still inadequate to meet the growing demand of Turkish consumers.
Over the last 20 years, MinAF has undertaken special afforestation projects, in an attempt to boost commercial walnut production. However, these initiatives did not yield the expected results since many of the trees were planted in marginal soils or unsuitable locations. Irrigation to these afforested lands is generally unavailable or too costly. In contrast, the newer commercial orchards are more successful since they use up-to-date techniques, and many have access to irrigation.
Up until the last 10-15 years, there was not a standard walnut variety being grown in Turkey. However, as growers have come to appreciate that certain propagation techniques result in higher yields, the use of standard varieties has now become more widespread. Chandler is the most popular walnut tree variety. However, there is still a need for introducing higher-yielding varieties that are suitable for local growing conditions. Turkey’s leading walnut research establishment, the Yalova Horticulture Research Institute, is developing new varieties for commercial production in different parts of the country.
The Turkish Walnut Producers Association (TWPA) was established in 2021 and held its first general assembly that summer. The association has about 30 members, who are all large, commercial growers by Turkish standards. As of 2022, association members collectively own 35,000-40,000 da of orchard land that is covered with 1 million trees. The Association’s members employ modern agriculture techniques on their mechanized commercial operations. The association aims to produce 20,000 MT, which is equivalent to about one-third of Turkey’s current production volumes, within the next 2-3 years. The association held Turkey’s first “International Walnut Conference” in September 2022, though as of August 2023 there are no signs that they will have a second one.
As of June 2023, TWPA announced that they will establish a brand in order to better market domestic walnuts. TWPA has stated that it is very hard for small domestic producers to get onto shelves of supermarket chains, because organized retail chains demand a steady supply of large amounts of walnuts, and are therefore bound to sell imported walnuts which can be steadily supplied. In order to get market access to small domestic producers, TWPA is establishing a brand under their Turkish acronym, CÜD. This brand will pack walnuts inshell in net bags of 1 kg to be sold in supermarkets with the 2023 harvest season. As of mid-September, though, they are not in stores. TWPA claims domestic production is tastier than any imported walnuts and is presented to the consumers at a better quality since they are not fumigated. Moreover TWPA is lobbying the GoT to increase customs tariffs to 43 percent, as they were before 2018.
Hazelnut Production
Note: USDA does not maintain a Production, Supply and Distribution for hazelnuts.
Turkey is the largest producer and exporter of hazelnuts in the world, accounting for about 70 percent of world production and around 75 percent of world exports. Production in MY 2023/24 is forecast lower year-over-year at 600,000 MT. By comparison, TurkStat is predicting production will reach 730,000 MT and the Turkish Union of Chambers of Agriculture predicted 718,000 during this period before the harvest started. Market sources believe this number is too high, though. During the harvest, it is understood that yields were not as high as expected.
Most years, the Turkish Grain Board (TMO) purchases and stores hazelnuts on behalf of the Turkish government. In the beginning of August this year, the President of Turkiye announced the official purchase price that TMO will pay for hazelnuts. The purchase price for Giresun quality hazelnuts is 84 TL/kg, almost double last year’s. The purchase price for Levant quality hazelnuts is 82.50 TL/kg, nearly a 60 percent increase compared to a year ago. Growers book appointments online to sell their hazelnuts to TMO. TMO pays the grower 21-days after receiving the hazelnuts in its warehouse. Since the actual crop was much less than predicted by GoT, the market price of hazelnuts surpassed these official prices reaching about 90 TL/kg quickly after harvest started, so not many were willing to sell their crop to TMO this year. TMO was advised to increase purchase prices if they wanted to stock hazelnuts on behalf of the GoT. In addition to TMO, the Union of Hazelnut Agriculture Sales Cooperatives (FISKOBIRLIK) sometimes purchases and stores hazelnuts to help keep domestic prices stable. As of September 15th, FISKOBIRLIK is purchasing the lowest quality Giresun variety hazelnut for 98 TL/kg.
The largest single buyer of Turkish hazelnuts is Italy’s Ferraro Hazelnut Company, the owner of the Nutella brand. Ferraro is the biggest hazelnut trader in Turkey, buying about one-third of Turkey’s annual hazelnut export volumes. Ferraro’s announced purchase price is slightly lower than the TMO rate at 80 TL/kg as of September. Approximately half of Turkey’s hazelnut exports are handled by international companies, such as Ferraro.
Although hazelnuts are grown in more than 48 provinces around Turkey, production is primarily concentrated along Turkey’s Black Sea coast. Hazelnut orchards are typically located within 30 km of the coast. In the western Black Sea region, the growing region starts at Zonguldak (east of Istanbul on the Black Sea coast) and extends east along the entire Black Sea and the mountains until close to the Georgian border. There are approximately 500,000 producers and 4 million people directly or indirectly employed by hazelnut production in Turkiye on an area of around 725,000 hectares.
Hazelnuts require relatively little effort to cultivate and input requirements are low. However, with better maintenance, the yield efficiency of Turkish hazelnut orchards could easily be improved. Due to socio-economic reasons, Turkish hazelnut orchards are not well maintained, and the trees are aged with some orchards dating back 70 years. Turkish hazelnuts usually mature between early and late August, depending on the altitude of the orchard and weather conditions. Hazelnuts are hand-picked from the trees and dried in the sun. Harvesting takes place during several weeks in August and September.
Read the full USDA-FAS report HERE
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China Forecast on Tree Nut Production and Imports
The USDA FAS (Foreign Ag Service) stationed in China forecasts commercial production of in-shell walnuts to remain unchanged from the previous year at 1.4 MMT (Metric Tons) in MY (Market Year) 2023/24. Cold winter temperatures in Xinjiang damaged the almond crop this year. FAS China forecasts almond production will drop sharply to 5,000 MT. Despite a slowed economy, solid demand and abundant global supplies of almonds and pistachios will encourage increased imports of these commodities. At the same time, retaliatory tariffs have reduced the market share of U.S. almonds and pistachios in China. There is demand for a limited volume of imported walnuts to supply a niche market.
Production
Walnuts
FAS China forecasts commercial production of in-shell walnuts at 1.4 MMT in MY 2023/24 (September-August), unchanged from the previous year. Despite unusually cold temperatures in winter 2022, walnut production in Xinjiang, the leading producer, will remain at the same level of last year, according to local trade sources. In Yunnan, the second largest producer, traders reported that heat damage between April and May 2023 will reduce walnut production mildly. A severe frost also occurred in April in Shanxi, Shaanxi, and Henan during walnut pollination, which negatively impacted the crop, leading to a 10-20 percent production decline in these minor walnut producing provinces, according to local traders. However, media reported that walnut production will increase significantly in southwestern China, especially Chongqing municipality, offsetting crop losses elsewhere.
The walnut acreage is stable for now but will possibly decline in the future because of over production. Industry sources indicate that the country’s actual walnut production is much larger than the commercial production because high labor costs in some areas, especially in the high mountains in Yunnan, leave many walnuts unharvested. In addition, traders report that farmers harvest walnuts from older trees in northern China. In Hebei province, for example, producers will crush the walnuts into oil for their own consumption rather than selling the crop. In addition, walnut farmers harvest around 10 percent of Chinese walnuts prematurely and sell them fresh (without the drying process) at various local markets.
Walnut quality varies from place to place due to a variety of reasons as well as the level of attention that growers give them. Currently, walnuts are planted in 21 provinces, and each province plants its own varieties, none of which are comparable with the U.S. and Chilean varieties such as Chandler that are favored because of organoleptic properties such as their light (kernel) color and no bitter taste. In addition, many farmers do not take particular care of their walnut plants, most of which sit on mountain/hill slopes, given poor market returns. However, Xinjiang walnut growers have improved varieties that produce higher quality walnuts and grow walnuts on level fields that allow them to use mechanized farming to reduce labor costs and increase yields. Taking advantage of its geographic location, Xinjiang walnuts are the main source of Chinese exports.
Almonds
FAS China forecasts China’s production of shelled almonds to fall dramatically to 5,000 MT in MY 2023/24 (August-July) due to extremely cold temperature in Shache county of Xinjiang in January that damaged a large number of plants, according to local contacts. Cold temperatures in winter and spring have always been a challenge to almond production in Shache. Adverse weather has wiped out the almond crop twice before in Shache. Under normal weather conditions, Shache produces around 50,000 MT of almonds (shelled basis) a year. The Xinjiang almond yield remains low, largely because of less productive varieties. As a result, Shache almonds are mostly consumed within Xinjiang. Shache almonds growers produce more than 95 percent of Chinese almonds. The acreage has remained quite stable at
around 60,000 hectares. Farmers in Henan province have reportedly planted some 530 hectares of almonds, but most plantings have not begun bearing and their performance remains to be seen.
Pistachios
China’s pistachio production is very limited. An industry report estimates the production at a mere 300 MT in MY 2023/24 (September-August). Farmers in Xinjiang province have reportedly planted around 1,300 hectares of pistachios to experiment with pistachio production in the province. It will probably take a while before farmers identify appropriate varieties and locations for pistachio production, if any.
Other Nuts-Macadamia Nut, Hazelnut, and Pecan
FAS China forecasts MY 2023/24 (September-August) production of inshell macadamia nuts at 57,000 MT, an increase of 36 percent from the previous year, according to a report by a major macadamia grower and processor in Yunnan. The production of macadamia nuts has doubled over the past five years in China, which is now the world’s third largest producer, according to statistics released by the International Nuts and Dried Fruit Council (INC). After a few years of rapid expansion, the planting area of macadamia nuts is stable at around 309,000 hectares. Yunnan province produced the most macadamia nuts in China, followed by Guangxi and Guangdong. Industry sources in Yunnan expect the country’s macadamia production to continue increasing in years to come as more plantings begin bearing.
FAS China forecasts China’s production of hybrid hazelnuts (in-shell basis) at 60,000 MT in MY 2023/24 (September-August), an increase of 3 percent from the revised number in the previous year. An industry contact noted that the acreage of hybrid hazelnuts, currently estimated at 126,600 hectares, has increased quickly over the past 7-8 years in Liaoning, Jilin, Heilongjiang, Shandong, Inner Mongolia, and Hebei provinces. China is likely to see moderate increases in hazelnut production in the next few years as new plantings gradually start bearing fruit. However, crop yield remains quite low as some of the first hazelnut growers used inappropriate varieties when they first started planting. China also produces wild hazelnuts, and the annual production is quite stable at around 40,000 MT (in-shell basis). Wild hazelnuts grow mainly in Liaoning province, with smaller areas spreading in Jilin and Heilongjiang provinces.
FAS China forecasts China’s production of in-shell pecans at 4,300 MT in MY 2023/24 (September- August) based on an industry report. Various sources have provided different pecan production numbers in China. Reports indicate that farmers in 8 provinces, led by Yunnan, Anhui, and Jiangsu, have planted around 83,000 hectares of pecans. Most plantings, however, have not begun bearing.
Price
Walnut harvest just commenced in Yunnan in September 2023. Yunnan is the second largest producer next to Xinjiang, where harvest activities will begin soon. The farmgate price for mixed grade walnuts (in-shell basis) are quoted at RMB 13 ($1.8) per kilo, slightly higher from a year ago, according to
Yunnan traders who noted that walnut prices have dropped so much in recent years that some farmers will not even bother to harvest their walnuts.
The world tree nut prices, except for pistachios, started to decline in 2022, largely because of weak market demand globally. The downward trend in prices of most tree nuts continued in the first half of 2023 and have almost reached five-year lows, except for macadamia nuts, according to a report presented at a recent tree nut conference. Traders predict that tree nut prices are most likely to stay at low levels in the remainder of this marketing year, due to abundant supplies.
Consumption
Increased consumption and more application of tree nuts in food processing will help tree nut consumption grow moderately in MY 2023/24. The rapid growth in tree nut consumption in recent years slowed during the pandemic. The anticipated rebound in consumption has not occurred after the removal of COVID restrictions in December 2022, largely because of weak economic performance. However, industry sources predict that nuts in meals, innovative nut products, and improved cost-effectiveness will be the three driving forces behind future consumption growth. For example, wasabi flavored macadamia nuts have greatly increased the consumption of this nut variety in China.
Snacking remains the major consumption pattern for most tree nut varieties, but food producers are using increasing quantities of nuts, especially low-priced ones, in a wide range of food products. Plant based drinks that use tree nuts as primary ingredients are gaining popularity. In addition to traditional walnut milk, “daily nut milk,” which contains milk and various nuts, has gained in popularity among younger consumers. While food processors are actively seeking new applications of tree nuts in the culinary and baking sectors, processed products, such as nut oil for food consumption and skin care lotion, have become a new trend.
The concept of tree nuts being a healthy and nutritional food keeps expanding among Chinese consumers, especially those in urban areas. However, industry reports indicate that per capita consumption of nuts in China is generally low and mainly seed nuts. The Chinese Food Guide Pagoda 2022 recommends between 25 grams and 35 grams of daily intake of beans and nuts, which food scientist have translated to 16-25 grams of nuts. However, daily consumption of nuts is around 10.3 grams in China, according to a presentation by a senior Ministry of Commerce official in August. On September 17, 2023, the China Nutrition Society released a White Paper on Nutrition, Health, and Nut Intake of Chinese Residents aimed to help consumers understand the health benefits of nuts and provide a scientific basis for mass education and the development of the nut industry.
Policy
Several U.S. products, including tree nuts, are still subject to a 15-percent retaliatory Section 232 tariff on top of MFN tariffs, despite being exempt from a 30-percent retaliatory Section 301 tariff on U.S. agricultural products since March 2020 (see GAIN report CH2020-0017). The following table provides a detailed breakdown of import tariffs and value added tax (VAT) on various nut products.
The General Administration of Customs of the People’s Republic of China (GACC) published a protocol on inspection and quarantine requirements for almonds from Spain, officially granting access to Spanish almonds to the China market on April 20, 2023. INC statistics indicate that Spain is currently the
world’s second largest almond producer, estimating Spain’s MY 2023/24 production (shelled basis) at 128,000 MT. Spain exports its almonds mainly to EU countries such as France, Germany, and Italy.All overseas tree nut manufacturers, processors, and storage facilities must register with the CIFER system before exporting food products, including tree nuts to the PRC, in accordance with Decree 248 (see GAIN report CH2021-0045). Decree 248 went into force on January 1, 2022.
China has published the final version of the General Quality Standard for Nut and Seed Food, which took effect on August 1, 2023 (refer to GAIN report CH2023-0106). This is a recommended standard that provides terms and definitions, classification, inspection methods and rules, as well as labeling, packaging, transportation, and storage requirements for nut and seed products.
Trade
Imports
China is a major importer of tree nuts and it relies heavily on the world market for supply of many varieties, especially almonds, pistachios, and pecans. Despite challenges such as a slowed economy and a strong U.S. dollar, industry contacts expect China’s overall imports of tree nuts to increase moderately in MY 2023/24, especially shelled products, driven by solid demand for healthy food products. In addition, global tree nut supplies, including production and stocks, will improve for most varieties in MY 2023/24, according to industry forecasts.
MY 2023/24 (September-August) imports of both raw and roasted pistachios will be higher from the previous year’s level on solid demand for this popular product pronounced as “happy nut” in Chinese, as well as greatly improved world supplies. Both the United States and Iran are expecting a dramatic rebound in production in MY 2023/24, according to industry forecasts. The top two global suppliers lost a large portion of their pistachio crops in the previous year due to bad weather. It is worth noting that China’s imports of raw pistachios started to decline in MY 2021/22 but roasted pistachio imports have maintained rapid growth for five years. Industry sources estimate that the import volume of roasted products has now exceeded that of raw pistachios. The roasted products fall under a different tariff line that is not subject to Section 232 retaliatory tariffs (see Policy). The retaliatory tariffs against U.S. products have negatively impacted the imports of U.S. pistachios (see Chart 1 below). Starting in MY 2019/20 tariffs resulted in a cost savings for Iranian pistachios. While U.S. pistachios still have a significant market share, tariffs continue to weigh on U.S. export growth.
China’s almond imports, shelled basis, will continue to increase in MY 2023/24 (August-July) because of abundant world supplies, lower prices, and dramatically reduced domestic production. Despite an estimated 43-percent reduction in the 2023 Australian crop, bumper harvests in California and Spain will likely improve world almond supplies. In addition, industry sources suggest that almond prices have declined since 2021, encouraging Chinese importers to buy more. Lastly, China opened its market to almonds from Spain, currently the second largest producer in the world, which may stimulate fresh almond imports. The United States remained the largest supplier of almonds to the Chinese market, but its market share has declined due to retaliatory tariffs (see Chart 2 below). The share of Australian almonds is quickly catching up, taking advantage of an existing bilateral free trade agreement.
China’s imports of macadamia nuts will likely increase in MY 2023/24 (September-August) from strong demand for this popular nut, despite improved domestic production. As a result of significant decreases in price, the country’s imports of macadamia nuts soared by more than 40 percent in MY 2022/23, with Australia and South Africa being the two leading suppliers to this market.
China’s walnut imports keep declining in the wake of increased domestic production. Chinese importers buy small quantities of inshell walnuts from Chile and shelled walnuts from the United States to accommodate the demand of high-end market for taste and color.
Exports
China is becoming a tree nut exporter, mostly of walnuts, as domestic production and food processing capacity improves. The devaluated local currency will also help boost the country’s nut exports in the short run. FAS China does expect China to export more walnuts in MY 2023/24 (September-August). As a result of increased domestic supplies, China’s walnut exports started to take off in MY 2020/21 and has kept increasing ever since. The main export markets (both inshell and shelled) lie in the Middle East, notably the United Arab Emirates, and Central Asia (e.g., Kyrgyzstan). The Russian market is also a strong market for shelled products.
China’s exports of macadamia nuts have been increasing steadily in recent years, although volume remains relatively low. Australia and the United States are currently the top two buyers of Chinese shelled macadamia nuts.
Marketing
China’s per capita disposable income increased by over 5 percent in the first half of 2023 according to PRC statistics and consumption levels are following a similar trend. In the post-COVID environment, the food and beverage industry has emerged as the leading growth sector for Chinese consumption. Specifically, China’s snack food market is leading the growth. Key trends related to the growth of the snack food industry in 2023 include clean label products, nutritional snacks, diverse flavors, and convenient packaging. “Clean label” generally refers to products made with fewer ingredients, while ensuring the ingredients used are simple and well known. Examples are foods that are purely natural, low in sugar, low in fat, organic, free from food preservatives, and/or contain fewer additives. Nutritional snacks tout specific benefits such as rich in protein, vitamins, or fiber, and have a similar appeal. Diverse flavors and convenience packaging tend to entice the younger generation.
Although different consumer groups have varying product preferences, nutritional value is by far the top factor influencing Chinese food and beverage purchases in the post-COVID environment. The best- selling items across all distribution channels are mixed nuts with dried fruit, small packages for individual consumption, and nuts with shells that are easy to crack. Specifically, China’s tree nut market has experienced significant growth. The market size has increased from $1.3 billion in 2005 to $6.2 billion in 2022. One tree nut snack category called “Daily Nuts,” which contains mixed nuts and dried fruits portioned in small bags, has become extremely popular. The “Daily Nuts” market size grew from $44 million to $1.5 billion in just 5 years.
Tree nuts serve not only as a source of personal enjoyment but are also commonly shared in different settings, including tourism, urban camping, and family gatherings. Tree nuts are also a popular gift item.
Consumers
The rising middle class has emerged as the dominant social group in China with the urbanization that has occurred in recent decades. The primary consumers of tree nuts are individuals who belong to the middle-class or higher, young professionals employed in white-collar jobs, households with a greater amount of disposable income, and seniors residing in first and second tier cities.
The trend of including “Daily Nuts” in everyday consumption in first tier cities (e.g., Beijing, Shanghai, Guangzhou, and Shenzhen) is increasing. It has become common for white-collar workers to order a cup of coffee along with a pack of nuts for breakfast. However, in smaller cities, the idea of consuming daily nuts is still in its early stages. Nuts are typically consumed during festivals, gatherings, or given as gifts in these regions. As urbanization and industrialization continue to boost income levels in these lower-tier cities, there is a significant potential for growth in snack consumption. Tree nuts are expected to play a major role in driving this growth.
Market Players Competition & Sales Channels
A series of city lockdowns in 2022 negatively impacted China’s economy and consumption patterns, leading to a 15 percent decline in the entire tree nut market size. Despite this setback, the market remains highly competitive, with over 300 snack food entities actively producing “Daily Nuts” and more players continuing to enter this lucrative market.
The competition in the tree nut market continues to be fierce. The combined market share of the top five companies is over 12 percent. The top five companies are the following: Three Squirrels from Anhui Province, Huatai Foods (with the brand Cha Cha) also from Anhui Province, Be & Cherry from Zhejiang Province, Bestore from Hubei Province, and Wolong from Shandong Province.
Nuts are available for purchase through various channels, including offline retail outlets and e- commerce platforms. Traditional channels include wholesale, hypermarkets, and wet markets. Snack specialty stores, supermarkets, community grocery stores, and convenient shops all carry tree nuts. E- commerce platforms have experienced tremendous growth in the past three years, partly due to the profound impact of COVID on consumer purchasing behavior. China accounts for over 50 percent of global online sales. Hybrid sales channels (i.e., online-to-offline) have become integral to building brand awareness for snack food companies looking to gain market share and diversify their clientele.
New Trends
The demand for healthy foods has also led to an increasing demand for plant-based products. Nut-based drinks are increasing in popularity. In addition, there are several innovative products in the market, including nut chips, which are often consumed as a yogurt topping. This new product caters to the growing interest in plant-based alternatives and offers a unique twist to traditional yogurt consumption.
Yogurt drink mixed with nuts, a new drink found in the market, serves as the inspiration for this delightful addition. Made from a blend of fresh avocado, pecan chips, provide a crunchy texture and
rich flavor when sprinkled over yogurt. Targeting the young generation and those focused on well- being fitness in affluent regions, this new product satisfies both taste and health preferences. — By Jadon Marianetti, USDA-FAS China Staff
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IKD Concern for Golden Hills Pistachio Variety
Internal Kernel Discoloration (IKD) is a recent cosmetic concern discovered in the Golden and Lost Hills varieties of pistachios, which now make up about half of the total planted acreage of California pistachios. While IKD is only noticeable inside the kernel and does not alter the flavor of the nut and is of no food safety concern, USDA Specialty Crops Inspection has indicated that they intend to consider this as a defect under the voluntary USDA Grades and Standards for pistachios and would score it as “damage”. The industry strongly disagrees with USDA on this as it would cause unnecessary and costly problems should they choose to move forward with this. Watch this brief interview with Bob Klein from the California Pistachio Research Board to learn more.
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