Arizona may amount to a fraction of the total U.S. pistachio crop, but it's those that foreign buyers ask for by name.

Arizona has an estimated 5,000 to 6,000 acres of pistachios and maybe 1% of total domestic production. Much of that production is sequestered in the southeast quadrant of the state where the high elevation desert experiences heavy monsoon rains in the summer and plenty of chill hours punctuated by an occasional dusting of snow in the winter.

Jim Zion, managing partner of Meridian Nut Company in California, markets the pistachios processed by Arizona Nut Company to domestic and international buyers. He is also a partner in the Bowie, Ariz. processing plant.

Arizona-grown pistachios tend to mimic Persian pistachios in color and flavor, Zion says. This makes them particularly attractive to Middle Eastern buyers.

This is important as the United States competes with Iran in world pistachio markets. The Islamic Republic produces an estimated 320,000 tons, or 640 million pounds of pistachios annually. The 2020 U.S. pistachio crop could come in at about one billion pounds for the first time in history.

Arizona growers began harvesting pistachios in August, a week or so ahead of California growers. Indications after the first shake of Gold Hills and Lost Hills varieties suggested an Arizona nut size that is large and in good condition. Arizona also has Kerman variety pistachios, which he says tend to be slightly smaller than the newer varieties.

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"What I've seen so far is the sizing is fantastic," Zion said as the second shake was getting under way.

Requested by name

Zion says international buyers were already asking specifically for the Arizona grown Lost and Golden Hills varieties as harvest got under way in late August. This could present a challenge for pistachio processors, he said.

"Do we start separating varieties as an industry?" he asked. "Not everybody does that, but we do that here because we like to use the Lost Hills and Gold Hills for a graded product. They love this product in Israel."

Zion continued, "I was just on the phone with my buyer in Israel. He was asking when we could start shipping the newer varieties. They're asking us specifically if we have any of the Arizona product in our warehouse."

The Arizona and New Mexico portions of the pistachio industry are at or near processing capacity, suggesting any new growth and/or changes in how buyers want their pistachios, will require an infusion of capital.

"At some point the New Mexico industry will need to decide what they're going to do regarding processing," he said. "Their limiting factor in growth right now is there processing."

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Much of New Mexico's pistachio production is in the Alamogordo area.

California growth

Zion says a new processing plant in Firebaugh, Calif. should be up and running for the 2021 harvest season. Touchstone Pistachio Company proposed to build a processing plant in the same area but was blocked after lawsuits filed by Wonderful Pistachios against Touchstone and the County of Fresno successfully forced operations there to cease.

Touchstone and Wonderful are embroiled in legal fighting over the move by Touchstone ownership to cease their relationship with Wonderful and strike out on their own.

Still, Touchstone is in the process of expanding operations in the Terra Bella area of Tulare County after the county granted permits to expand in the south county area.

Wonderful is said to control most of the pistachios in California.

Meridian nut sales

As a marketer of tree nuts, and a partner in Arizona Nut Company, Zion sees a global view and how that plays with growers across the three states, hence his activities across the U.S. pistachio growing region that includes California, Arizona, and New Mexico.

"To be a processor you've got to have a base, and either you have your own product, or you have a coherent and solidified grower base," Zion said.

He sees opportunity across the region, particularly in Arizona as international buyers continue to ask for Arizona pistachios by name. Still, he is working with California processors to market nuts globally.

Zion says international buyers already favor American pistachios over competing products from Iran. This just isn't the case with the Middle East, but China, "who still likes what America produces," he said. In marketing terms, Zion promotes the "American" crop to international buyers, not the "U.S." crop. While this may seem as semantics to some, international buyers view the "U.S." moniker as one associated with the government, while "American" carries with the long-held international sentiment that American agricultural goods are high quality, safe commodities sought worldwide.

Growth in the American pistachio industry can be credited too with the efforts of the Fresno-based trade association, American Pistachio Growers, that continues to market pistachios globally. It's through those efforts, Zion says, that the industry has gained access to ingredient markets.

"If you look at the shipping statistics, you'll see we're down on inshell shipments but up on kernel shipments," he said. "We're seeing a lot more interest in pistachio kernels, even with the price point, because it's different and unique. The food companies are looking for something to differentiate themselves."

Limits and challenges

As California pistachio acreage continues to grow at over 10,000 acres per year, growth remains much slower in the other states where the nut is produced. The reasons for this are twofold, Zion says.

"I think the real limitation is management," he said.

While the agricultural colleges in California and Arizona continue to produce students looking for career opportunities in agriculture, he admits that finding someone willing to move to a remote location in Arizona or New Mexico may not be attractive to a 24-year-old college graduate.