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Paramount Farms39 Andy Anzaldo
<p> Paramount Farms&#39; Andy Anzaldo.</p>

Paramount predicts 1 billion pound pistachio mark by 2020

Paramount Farms International predicts U.S. commercial pistachio production could reach the 1-billion-pound milestone between 2018 to 2020. If accurate, the U.S. commercial pistachio industry would have matured from its first plantings in Chico, Calif. to a 1-billion-pounder crop in just over 30 years. Paramount&nbsp;predicts the 2012 U.S. pistachio crop could reach the 550 million pound to 575 million pound range, Andy Anzaldo says. &nbsp;

Paramount Farms International (Paramount), the world’s largest pistachio processor, predicts U.S. commercial pistachio production could achieve the 1 billion-pound milestone between 2018 to 2020.

If this estimate is accurate, the U.S. commercial pistachio industry would have matured from its first plantings in Chico, Calif., to a 1-billion-pounder crop in a little more than 30 years.

This bullish projection of 1 billion pounds in the next six to eight years is according to Andy Anzaldo, Paramount’s general manager of grower relations.

Paramount is the largest pistachio processor in the world, processing 60 percent of the California crop. California growers produce about 95 percent of the U.S. pistachio crop. Paramount is the largest pistachio producer in the Golden State.

The company also ranks No. 1 in almond production.

“Paramount Farms predicts the 2012 U.S. pistachio crop could reach the 550 million pound to 575 million pound range,” Anzaldo said.

Based on this prediction, the math reveals a required annual crop growth of 10 percent to 12 percent for the next six-to-eight consecutive years to achieve 1-billion-pounds.

Western Farm Press met with Anzaldo at Paramount’s main Lost Hills processing facility just days before the company kicked off its 2012 harvest season in early September.

The top California-pistachio production counties include Kern, Madera, Fresno, Kings, and Tulare, respectively. The balance is grown in Arizona, New Mexico and Texas.

The U.S. took over the reins last year from Iran as the world’s largest pistachio producer.

Anzaldo pegs current California pistachio plantings at 168,000 bearing acres and 75,000 non-bearing acres for about 243,000 acres total. He predicts plantings of 15,000 to 20,000 new acres of pistachios in California next year.

About seven years are required from planting to harvest the tree’s first commercial crop.

Paramount farms about 30,000 acres of pistachios in California; about 25 percent of the state’s acreage. In addition, about 600 producers grow pistachios for Paramount under contract. The pistachios are harvested at the company’s four processing locations.

For California’s top tree nut crops — almonds, walnuts and pistachios, the industry has achieved substantial growth strides over the years. Almonds, the state’s largest tree nut crop, achieved 1-billion-pound crop status about a decade ago, and now have leapfrogged to 2 billion-pounds — doubling production in just 10 years.

Financially, Anzaldo says pistachios have generated about three times more net income for growers than almonds and walnuts over the last decade.

“The grower net return for pistachios has been about $3,000 pounds per acre on average over the last 10 years,” Anzaldo said. “Almonds and walnuts over the same time period generated an average of $1,000 annually.”

The Paramount leader noted, “There is no question that the pistachio is a very profitable tree nut.”

Paramount’s 2012 opening minimum pistachio prices released in July were $2.10 per pound split inshell and $2.75 per pound for kernels; the same opening price as last year. Last year’s split inshell price later increased to $2.65 per pound.

Anzaldo predicts average nut quality and size this year. Nut size has been larger over the last several years.

NOW levels highest in years

On the pest and disease side, the Navel orangeworm (NOW), the pistachio’s No. 1 pest threat, is at the highest level in years with about 1.5 percent nut rejects. The highest NOW reject percentage was 2 percent in 2007. This year’s NOW increase is mostly tied to excessive August heat which caused early hull split which made the kernels more accessible to NOW.

According to the UC Davis IPM website, the NOW creates a small pinhole in the nut meat. As the worm matures, it feeds on the entire nut causing webbing and frass. The infested nut is unmarketable.

“Paramount has proactively encouraged its growers to take proactive steps to minimize NOW damage,” Anzaldo said.

Proactive efforts include winter sanitation in orchards where mummy nuts (blanks) are shaken from the tree and disked into the soil to kill overwintering worms. Insecticides also successfully minimize NOW infestations. In addition, growers harvest early to reduce exposure to the insect.

About 99 percent of the California acreage is planted in the Kerman variety. Making inroads in plantings are two UC Davis-developed varieties called Golden Hills and Lost Hills. Of the two, Anzaldo says Golden Hills is the more planted. The new varieties can be harvested a week before Kerman which benefits the grower with an extended harvest window.

Today, good-quality soils in California can help produce “green nut” yields of 4,000 pounds per acre annually. Marginal soils with higher saline and alkali levels generally yield about 3,000 pounds per acre.

With a 1 billion pound pistachio crop in the industry’s sights, selling bin buster crops in the future centers on expanded global pistachio marketing.

Get Crackin’

This year, Paramount launched version 4.0 of Get Crackin’ advertizing campaign which will include $25 million spent on television ads alone. The original Get Crackin’ campaign was launched three years ago.

“Paramount Farms has spent $100 million over the last three years to reach consumers through the Get Crackin’ campaign,” Anzaldo said.

Household penetration is how Paramount measures consumer consumption. Prior to the campaign, 16 percent to 17 percent of U.S. households consumed pistachios annually. Over the last three years, household penetration has approached the 25 percent mark.

Household penetration for almonds and peanuts is the 40 percent range.

“Domestically, consumers are buying more pistachios,” Anzaldo explained. “This trend needs to continue with more non-bearing acreage entering production.”

Two thirds of Paramount pistachios are sold internationally while the balance is sold domestically.

China is the top importer of U.S. pistachios. Sales have spiraled from 5 million pounds five years ago to more than 100 million pounds this year. Previously, China purchased most of its pistachios from Iran, but Anzaldo says U.S. marketing efforts convinced the Chinese that California pistachios are of higher quality than Iranian pistachios.

The European Union is the second largest U.S. pistachio importer.

Paramount’s four California pistachio processing facilities include two plants in the Lost Hills area of Kern County, the Coalinga facility in southwestern Fresno County, and a new $60 million facility in Firebaugh in northwestern Fresno County which opened in early September.

As with all tree nut crops, food safety is front and center. The domestic pistachio industry experienced a large financial loss when a possible case of salmonella was tied to California pistachio processor Setton Farms three years ago.

As a result, pistachio processors have enhanced food safety efforts. Renovations at Paramount’s main plant in Lost Hills include a “ready-to-eat” processing facility where pistachios are pasteurized or roasted to further minimize a salmonella occurrence.

“The facility has the most modern and state-of-the-art equipment along with the tree nut industry’s highest level of food safety standards,” Anzaldo said.

Anzaldo centered his final comments on the long-term efforts needed to maintain a successful industry.

“The pistachio industry will continue to be successful as long as we successfully market larger crops, expand processing capabilities, and maintain nut quality,” Anzaldo concluded. “Interwoven in this focus must be profitability for growers over the short and long term.”

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