While tree nut producers have faced some difficulties, Euler Hermes, the world’s leading provider of trade credit insurance, expects growing global interest in healthier foods to continue to spur demand.
Umar Sheikh, industry sector credit analyst at Euler Hermes, said, “Increasing international demand for U.S. tree nuts, in particular, will help maintain margins for local growers.
The company’s “Food Industry Outlook” report highlights the situation with U.S. tree nuts. “U.S. producers are taking advantage of the growing consumption of tree nuts in emerging markets; more than half of all U.S. almonds, hazelnuts, pistachios and walnuts are exported. Additionally, increased international demand, combined with a drought that damaged supply in 2011, led to a price spike and a 17 percent drop in consumption last year. Going forward, local growers should benefit from the increasing awareness of nuts’ health benefits, as well as growing demand for U.S. nuts abroad.”
“Increasing international demand for U.S. tree nuts will help maintain margins for local growers (in 2014),” the report says.
The report explains how California nut growers have a nearly exclusive hold on U.S. production of almonds, walnuts and pistachios, which are in high demand today.
“Growing consumption of nuts can be linked to heightened interest in health and nutrition. Per capita nut consumption in the U.S. has continued to increase, topping out at four pounds in 2011 versus a 2.2 pound average over the prior 25 year period. The most commonly consumed nuts in the U.S. are almonds, walnuts, pecans and pistachios. Approximately 90 percent of nuts are grown in California, including virtually all of the country’s almonds, walnuts and pistachios,” the report says.
The increase in U.S. demand for nuts is shadowed by similar increased foreign consumption of nuts, but nut consumption can be price sensitive. When supply is low and prices are high, consumption does drop.
“Producers are taking advantage of growing consumption in emerging markets, currently over half of all pistachios, almonds, hazelnuts and walnuts grown in the U.S. are exported. Major customers include Hong Kong, Germany, and Canada, though local growers are not overly reliant on any one foreign market. Cashews account for approximately half of all nut imports, coming primarily from Vietnam and India. Pecans, while still popular in the U.S., have seen a spike in exports in recent years, primarily to Hong Kong and China. Growing international demand, coupled with a drought that damaged supply in 2011, led to a spike in prices and a 17% drop in consumption last year.