Fruits and Tree Nuts, NEC

SIC 0179

Companies in this industry

Industry report:

This category covers establishments primarily engaged in the production of fruits and nuts, not elsewhere classified. This classification also includes establishments deriving 50 percent or more of their total value of sales of agricultural products from fruits and tree nuts (Industry Group 017) but less than 50 percent from products of any single industry.

This relatively small American industry produces fruits that are normally grown in more tropical regions of the hemisphere. Avocado orchards, banana farms, coconut groves, date and fig orchards, kiwi fruit farms, olive groves, and pineapple and plantain farms are members of this category. Avocado, olive, and date production comprise the bulk of crops in this category. Demand for tree nuts grew during the last decades of the 2000s and demand was expected to remain strong into the 2010s as a focus on health benefits drove Americans to consume more nuts. Per capita consumption of tree nuts grew from about 1.7 pounds in 1977 to over 3.0 pounds by the late years of the first decade of the 2000s.

In 2009, the entire fruit and tree nut industry's production value was nearly $17.1 billion, down from $18.3 billion in 2008 and $18.9 billion in 2007. California accounted for about 90 percent of all tree nut production, including almost all almonds, walnuts, and pistachios. Georgia, Texas, and New Mexico produce some of the nation's pecans; Oregon contributes to hazelnut production; and Hawaii produces macadamia nuts. Almonds are the largest sector of tree nuts, accounting for about $1.8 billion in revenues in 2009, followed by pistachios ($787 million) and pecans ($398 million). Hazelnuts and macadamia nuts made up smaller sectors, with production values of $75 million and $39 million respectively.

The number of farms engaged in producing fruits and tree nuts in this industry had been in steady decline since the 1980s, and the industry was fragmented. In the early 2010s, about 5 percent of the farms generated about 40 percent of the income. The top companies in the tree nut industry were Dole Food Company of Westlake Village, California, a privately owned company with over 75,000 employees and more than $7.6 billion in revenues, and Blue Diamond Growers, a private cooperative in Sacramento, California, with revenues of $709 million. Blue Diamond was founded in 1910 and, by 2008, had about 3,000 California almond growers as members. The group also sold hazelnuts, macadamia, pistachio, and other nuts to food and candy makers and others in the food industry.

Looking at the individual components of this industry classification is necessary due to great fluctuations in various crop yields from year to year. The apparent lack of any one statistical pattern over a span of a decade may be due to the fragile nature of such perishables as avocados and olives. These smaller, exotic crops are extremely dependent on favorable weather conditions for the success of the year's harvest. The import market also plays some role in the fluctuation within the industry.

World avocado production has risen steadily since the 1990s, and the United States was the third largest producer in the late years of the first decade of the 2000s. Imports accounted for roughly 33 percent of U.S. avocado consumption, as compared to 17 percent in the early 1990s. While more than 60 countries produce avocados commercially, the top 10 avocado-producing countries supply 75 percent of the world's production. The United States, however, only exports approximately 3 million to 6 million pounds of avocados each year--equal to roughly 1 to 2 percent of production.

The United States produced 232 million pounds of avocados during 2008-9 and the U.S. Department of Agriculture (USDA) projected production to reach a 5-year high of approximately 473 million pounds in the 2009-10 season. New varieties and improved production practices helped boost yields and satisfy growing consumer demand. U.S. avocado consumption increased by more than 50 percent, from an average of 1.6 pounds per person during the 1990s to an average of 2.6 pounds per person in the first five years of the 2000s. Pounds per capita reached just over 4.0 pounds in 2010. The USDA projected increased consumption in 2010-11 based on the bumper crop in the United States. Mexico and Chile, the main sources of imported avocados to the United States, also experienced strong production in 2009-10. Imports for avocados (primarily from these two countries) were about 800 million pounds. California produces about 90 percent of U.S. avocados. Florida and Hawaii account for the remaining crop production.

California also is the center of olive production in the United States. The two main varieties in California are Manzanillo and Sevillano, which respectively accounted for roughly three-fourths and one-fourth of California olive trees. The value of U.S. olive production in 2009 totaled $40.3 million, up from a low of $18.2 million in 2006 but significantly down from $86.7 million in 2007. California accounted for nearly 100 percent of harvested acres of olives in the United States. Total acreage has remained between 30,000 and 40,000 acres since 1980. Almost 100 percent of olives produced were destined for processing. Of this amount, 88 percent were used for canning and 9 percent were crushed for olive oil.

Date production in the United States is centered primarily in California's Coachella Valley, which hosts more than 95 percent of U.S. date acreage and an annual Date Festival. In the early years of the twentieth century, ranchers received date plantings from the USDA as an incentive to settle the region. The industry did not begin to thrive until 1913, when a collective organization was formed to purchase imported date plants from North Africa. The value of date production in 2009 was $29.7 million.

Growers of fruits and tree nuts face stiff competition from foreign competitors. This sector of agriculture in the United States is relatively small compared to its status in other countries. For instance, countries in North Africa produce a sizable portion of figs and dates for export abroad, while olive tree acreage figures for areas in the Middle East, Greece, and Italy are staggering. The industries have been vital components of the local economy there for thousands of years. However, on American soil, growers are finding some success in the cultivation of exotic fruits such as mangoes and passion fruit.

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