SOURCE: Rabobank N.A.

Rabobank N.A.

November 17, 2011 11:30 ET

Rabobank Says China's Changing Economy Good News for Many American Farmers

As Chinese Government Pushes for Consumer-Driven Economy, U.S. Tree Nut Growers Benefit With Historic Production Records

FRESNO, CA--(Marketwire - Nov 17, 2011) - Amid American economic woes, China is fueling the success of a particular business sector by leading a strong export demand for U.S.-grown tree nuts, a trend that is likely to continue, according to a research study issued today by Rabobank's Food & Agribusiness Research and Advisory group.

U.S. almond, walnut, pistachio, pecan and hazelnut growers have experienced banner years of crop prices recently, as China's once largely agrarian country transforms its economy from export-driven to consumer-driven. The move is giving China's urban middle class more purchasing power to afford premium products such as tree nuts. Additionally, an expanding worldwide health and wellness movement has found fertile ground in China, where these nuts play a key role in balanced nutrition. The two shifts have U.S. tree nut farmers enjoying record prices and scrambling to plant more acreage as the projected demand will last into the long term.

"The Chinese government is promoting an economy that is favorable for many U.S. exports, especially tree nuts," said the report's author, Karen Halliburton Barber, assistant vice president and senior agricultural analyst with the Food & Agribusiness Research and Advisory group. "As the Chinese middle class grows, so will the demand for almonds, walnuts, pistachios, pecans and hazelnuts. This is good news for growers here in the U.S."

China has long been viewed across many industries as a threat to the U.S. marketplace. Now, in many sectors, China is becoming the customer and the U.S. is becoming the seller. As China's middle-class economy grows, so does the standard of living and the products demanded -- including food items once limited to the wealthy, or only purchased for special occasions. The same growing middle class is also becoming more in-tune with their health -- originating in the Chinese culture's long-standing affinity for tree nuts in traditional medicine. This is good news for U.S. growers, but could pose a risk to U.S. processors.

"U.S. processors face a dual challenge: the rising cost of tree nuts and competition from lower-cost processing in China," said Barber. "Many importers have been reducing their costs by buying in-shell nuts directly from U.S. growers and shipping them overseas for processing."

Barber contends that there are inherent risks with U.S. growers placing so much dependency on the Chinese market, especially if the U.S. cannot meet short-term demands and China develops trade relationships with other countries who grow the same nuts. In addition, the increasing strength of the dollar could raise the costs of the exports. Part of the increased costs could be passed on to Chinese consumers, who may shy away from increased prices. Barber notes that, while this is a concern, premium imported tree nuts are already being purchased by higher income segments of the population who are more likely to afford the higher prices.

The report provides individual outlook profiles for almonds, walnuts, pistachios, pecans and hazelnuts, including each nut's challenges and opportunities. The study also touches on other global export markets and their effect on the short-, medium- and long-term demand for U.S. tree nuts.

Media can obtain the full report, "U.S. Tree Nuts Feeding the Growing Appetite in China," by contacting Andy Frokjer at Rabobank, N.A. or Brandon Souza at AdFarm.

About Rabobank, N.A.
Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With nearly 120 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision making and active community involvement by our employees.

About Rabo AgriFinance
Rabo AgriFinance is a leading provider of financial services for agricultural producers and agribusinesses in the United States outside of California, adding value with industry expertise, client-focused solutions and long-term business relationships. The Rabo AgriFinance nationwide network of relationship managers, crop insurance and risk management specialists offers a comprehensive suite of services, including loans, crop insurance and sophisticated risk management products.

Rabobank, N.A. and Rabo AgriFinance are divisions of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks.

About FAR
The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to gather key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and look at the megatrends that ultimately influence clients' capital strategy. These analysts are internationally respected experts in everything from protein to produce, inputs to oilseeds, and their knowledge is shared regularly with Rabobank, N.A. and Rabo AgriFinance customers.

Contact Information

  • Media Inquiries:

    Brandon Souza
    (916) 376-7862
    Email Contact

    Andy Frokjer
    Rabobank, N.A.
    VP/Marketing Communications Manager
    (805) 473-6885
    Email Contact