Giant Crops Loom

Giant Crops Loom

The statistics are alarming at first glance. U.S. pistachio acreage, which is limited to three states, California, Arizona, and New Mexico, with the lion’s share in the Golden State, has been rising at a rapid rate. Total acreage climbed from 177,000 in 2007 to 215,000 in 2010. It’s estimated that another 15,000 acres were planted this past winter, bringing the unofficial total to 230,000.

It’s even more alarming when you realize that pistachios are one of the least precocious of tree crops, and don’t generally bear a crop until the trees are seven years old. That means there are some huge crops looming on the horizon, says Richard Matoian, the executive director of the Western Pistachio Association (WPA). “The industry figures indicate that 40% of total acreage is nonbearing, so we’re predicting larger crops in 2013 and 2014,” he says. “By 2017, we will have a doubling of the size of the crop. In 2009, the crop was 354 million pounds, and we believe we will be at 800 million by 2017.”

Growers aren’t panicking, though, for a couple of reasons. First, more and more health studies show that like other tree nuts, pistachios are a healthy snack. Second, and perhaps more importantly as a practical matter, is that people love pistachios. And they’re willing to pay for them. Consider that while the crop was up a whopping 48% in 2010 — pistachios are also very much an alternate bearing crop — the price still went up 25%. Growers received an average of $2.22 per pound last year, a new record.

Asia Promising

Growers are also confident because people in Southeast Asia and India especially seem to like pistachios. As the relatively large populations in those parts of the world continue adding income at a relatively rapid rate, they are becoming hugely important to marketers. For instance, China’s pistachio consumption went from $5 million-worth just six years ago to $109 million in 2010, says Matoian. “And that’s just one bright shining example,” he says.

Pistachio growers know that consumption must continue to increase in countries such as China and India, which just lowered its tariff on the crop, if they are going to profitably market those big crops that are coming. Because of that, they are changing their name. They have found the word “Western” in “Western Pistachio Growers” can be a little confusing. For instance, in Europe people think first of Western Europe. And when tested in Asia, people tended to think of Wild West images like cowboys. “Also, there was even confusion here in the U.S. with Western,” says Matoian, noting that no pistachios are grown in the eastern U.S. “But people would ask — seriously — about the Eastern Pistachio Association.”

So they tested out various names, and one consistent — and welcome — result was that the term “American” tested well. It also quickly and easily identifies the origin of the product in overseas markets. But best of all, it’s a marketer’s dream. “It was shown to provide consumers with a sense of quality and safety,” he says.

A Volunteer Effort

So this year the Western Pistachio Association will gradually transition into becoming American Pistachio Growers. A voluntary organization that is funded with an assessment of 4¢ a pound, it represents about 35% of the industry volume and about half the 800 growers in the three states. Matoian says he’s really proud of what the WPA has achieved in the four years since it got up and running following the dissolution of the California Pistachio Commission (CPC). At the time, it was pretty much strictly a political organization with a lobbyist back in Washington, D.C.

But with no CPC, a lot of leading growers got together and realized they needed to do something about all that nonbearing acreage, says Matoian. In 2007, they expanded WPA activities and in 2009, they ramped up domestic PR efforts, launching the successful “Green Nut” campaign. Then just last year, realizing that a key to success was going to lie overseas, they took over the California Pistachio Export Council’s international marketing and now direct the crop’s federal Market Access Program.

So despite the many acres of pistachios about to come on-line, Matoian says, American Pistachio Growers is ready, willing and able. “Our industry trade association is voluntary — we have a strong core group of growers and processors who believe in the generic message of American-grown pistachios. I feel very fortunate to be working in a commodity where the growers are willing to put their money where their mouths are,” he says. “They’re not waiting until the big production is here — they’re doing it now. And that’s exciting.”

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