Pistachio growers gear up for bigger crops

Leaves fly as a crew shakes pistachio trees on Tom Coleman’s Madera County farm. Nuts, still in their hulls, are shaken from the trees, separated and loaded into bins.

No longer what one farmer calls “the awkward teenager,” California’s pistachio business is growing into its own.

As more Central Valley farmers have decided to grow drought-tolerant pistachios, the state’s total pistachio acreage has climbed to 210,000. Of that total, 125,000 acres are bearing crops, and many of the non-bearing trees are set to produce a crop any season now, said Richard Matoian, executive director of the Western Pistachio Association.

“Additional production is going to be coming off in the next few years and the industry realizes that it needs to gear up now to get ready,” said Matoian, who oversees the association that represents pistachio growers in California, Arizona and New Mexico. “That is why you are seeing so much promotion now: We’re gearing up for it.”

Coleman has increased his pistachio plantings.

This year’s crop is estimated to yield 350 million pounds, compared to the state’s first commercial crop of 1.5 million pounds in 1976.

“Our highest planting years were from 2004-2007, so we figure by 2017 we’ll see the bulk of the new acres come into production,” Matoian said.

As more trees come into production, the greater volume allows pistachio marketers to expand demand for the nuts, according to growers like Tom Coleman of Coleman Farming, who farms pistachios in Madera and Fresno counties.

“The pistachio industry is continuing to grow,” said Coleman, who has increased his pistachio plantings from 500 acres to 750 acres in just a few years. “We realized that if we put our mind to it, we really can move a lot of product. I think more acreage coming into production was scary to people, but we ended up being able to move it by being more proactive with marketing.”

An employee at Coleman Farming Co. loads a bin of pistachios into a truck bound for processing.

Fifty percent of Coleman’s pistachios are divided among three processors, and the remaining 50 percent go to Paramount Farms in Kern County, the state’s largest pistachio grower and processor.

Andy Anzaldo, Paramount Farms director of grower relations, said Paramount markets and processes 60 percent of California’s crop. This year, it has contracted with more than 500 pistachio growers and announced a price of $2.50 per pound.

Paramount, which markets the Wonderful Pistachio brand, has focused on export growth and marketing of the nut’s health benefits.

“This is an industry now that has met every challenge as far as increasing its acreage, increasing its production and increasing demand at the same time,” Anzaldo said, adding that Paramount plans to continue its “Get Crackin’” promotional campaign this fall, which included what he described as the first nationally televised commercial for pistachios.

Crop forecasters predict that California farmers will harvest 350 million pounds of pistachios this year.

As pistachio marketers work to expand markets, he said, they will increasingly look for buyers around the world.

“Most of that growth will come from the export market, predominantly China,” Anzaldo said. “China is now the third-largest export market for California. That market has a lot of opportunity, along with India.”

Six years ago, about 35 percent of the California pistachio crop was exported and today that has jumped to 65 percent. Matoian attributed the increase to foreign buyers recognizing the health benefits of pistachios, rising incomes in countries such as China and India, and the value of the U.S. dollar. A U.S. Department of Agriculture forecast for 2009-10 estimates U.S. pistachio exports will increase 10 percent, due to continued strong shipments to Hong Kong and China.

Matoian recently joined an agricultural delegation that accompanied Gov. Schwarzenegger on a trade mission to China, Japan and South Korea.

“In a five-year period, sales of pistachios to China have gone from about $5 million to a little over $70 million. That is typical of the tremendous growth we’ve seen in a number of countries,” Matoian said.

Pistachio grower Jim Zion, managing partner of Fresno-based Meridian Nut Growers, which sells and markets pistachios and other nuts and fruits, said he expects an increase in pistachio sales this year and a considerable jump next year.

“In the last two to three years, we’ve seen our volume on marketing jump from 15 (million pounds), to 20, 25 and now 35 this year, and next year probably closer to 50,” Zion said. “I think the industry grew up. We are no longer the awkward teenager. We’re entering adulthood.”

Zion said 70 percent of what he sells goes to the export market, with the European Union being the primary destination, followed by China, Japan and Malaysia.

Most pistachios are sold as an in-shell snack nut and processors say they see an untapped market for pistachios used as ingredients.

“As pistachio volume gets to the point that we can be steady suppliers on the ingredient side, more and more snack companies are looking at using pistachio meats as ingredients in trail mixes, cookies, candy or other baked goods,” Zion said. “Companies are asking, ‘What is new? What can we do to differentiate ourselves from everybody else?’”

A U.S. ban on Iranian pistachios went into effect in July, leaving California growers with an open domestic market, Matoian said. Pistachio growers have seen a 29 percent increase in domestic sales during the fiscal year, compared with a 9 percent increase for exports.

“We’ve had relatively flat sales domestically, so to have such an increase is very positive and goes to show the power of advertising and what effect it can have on consumers,” Matoian said.

In addition to Paramount’s “Get Crackin’” campaign, the Western Pistachio Association created “The Green Nut” campaign to market U.S. pistachios.

California grows 98.5 percent of the nation’s pistachios, with an annual farm gate value of $700 million.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.