Though not the largest permanent crop by acreage in California, pistachios still have a significant economic impact in the state.
The report commissioned by the American Pistachio Growers (APG), released at last week’s annual meeting in Palm Desert, Calif., puts the economic benefit of growing and processing pistachios in California at nearly $3.6 billion based on just over 239,000 bearing acres from Red Bluff to Arvin. As that acreage climbs to an estimated 350,000 by 2023, the industry’s impact on the California economy will continue to grow.
California pistachio growers spent nearly $1 billion on goods and services in 2016. Processors spent almost an identical amount on similar goods and services, according to the report’s author, Dennis Tootelian of Tootelian & Associates in Sacramento.
“This is a big number,” Tootelian said of the $3.6 billion total economic impact.
The report relied on data provided by APG, the California Department of Food and Agriculture, U.S. Department of Agriculture, census figures, the State of California, the U.S. Bureau of Labor Statistics and a 2015 report by the University of California. Tootelian has performed similar economic impact studies for companies like McDonalds, Walmart and the Chicago Olympic Committee.
In the pistachio report, Tootelian looked at direct, indirect and induced benefits; considered production, processing, and labor; and the economic benefits of the jobs created to serve the pistachio industry. Among the report’s findings:
- Economic output of $3.6 billion equates to nearly $9.8 million per day, including direct spending by growers and processors, and the additional business activity triggered by that spending;
- More than 22,600 jobs are created from the spending by growers and processors;
- Nearly $1.1 billion in labor income is generated by the business activities of these growers and processors; and,
- More than $120.6 million in indirect business taxes, not including income tax, is generated by this spending.
“I knew these would be big numbers, but I didn’t know it was that big,” said Jim Zion, APG board member and chairman of the organization’s Government Policies and Partnerships Committee.
“I don’t think we realize how big we’ve become and how much activity we’re generating for the local economies,” Zion continued.
Zion says the purpose of information like this is to share it with lawmakers and policy makers at the state level, to answer for those who control the state’s tax spending and water allocations what Tootelian calls the “what’s in it for me” question.
The activities of pistachio growers and processors “are diffused throughout California’s economy, touching nearly every aspect of life in the state,” Tootelian said.
Those employed directly by the pistachio industry spent significant portions of their income on housing ($277.1 million), transportation ($132.8 million) and food ($105.7 million), according to the report.
This kind of spending happens every year because of the nature of the agricultural industry, Tootelian said.
Tootelian extrapolated where the $120.6 million in business taxes could go in the California budget. For instance, state spending on the Arts Council could have been funded for nearly seven years at 2016 levels, or the California Conservation Corps at over 107 percent of its annual budget.
That level of tax dollars could also fund nearly half of the state’s contribution to the Department of Food and Agriculture, and nearly 30 percent of state spending for the Department of Fish and Wildlife.
Indirect jobs – those created as pistachio growers and processors require goods and services – also create an economic impact across the state. Processors alone accounted for over 11,000 indirect jobs to serve their sector. Labor income from those jobs alone totaled more than $537.5 million in 2016.
Arizona and New Mexico
A similar study commissioned by APG looked at Arizona and New Mexico, the two other locations where pistachios are commercially grown in the United States. That report was prepared by the Arizona State University Seidman Research Institute.
Pistachio farming in Arizona contributes an economic impact of $31.3 million. That includes just over 300 jobs with more than $13 million in labor income.
New Mexico’s total economic impact of pistachio production is currently estimated at almost $7.1 million, with 89 jobs and $3.1 million in labor income resulting from the nut crop.
U.S. pistachio growers produced over 600 million pounds from their 2017 crop, which, due to the alternate bearing nature of the crop, was down about 300 million pounds from the record production in 2016. That year California growers produced over 896 million pounds of pistachios.