The Western pistachio industry is earning bragging rights.

In California where 98 percent of the U.S. pistachio crop is grown, the pistachio vaulted from the 16th top crop in value to the ninth slot in 2010. The green nut moved up the ladder from California’s seventh largest agricultural export crop to the fourth slot, ahead of walnuts.

“With the (record) 2010 crop, the farm gate value of the U.S. pistachio industry went over $1 billion for the first time in history,” Richard Matoian reported to a packed house of growers, processors, and industry members at the U.S. Pistachio Conference in Santa Barbara, Calif., in late February.

Matoian is the executive director of the Western Pistachio Association (WPA) based in Fresno, Calif. The organization recently announced an upcoming name change to the American Pistachio Growers effective by summer.

In California, the record-smashing 2010 crop value was $1.16 billion or $2.22 a pound from about 137,000 harvested acres; almost double the 2008 and 2009 crop values, according to the National Agricultural Statistics Service (NASS). NASS estimates 2010 California pistachio production at a record 522 million pounds. U.S. pistachio production totaled about 528 million pounds.

Arizona NASS does not estimate pistachio acreage. According to the 2007 Census of Agriculture, Arizona pistachio acreage totaled about 1,500 acres, New Mexico with 767 acres, and 330 acres in Texas, Nevada, and Utah.

Industry members point to a perfect growing season in California last year for pistachios where the cool late spring combined with mild summer temperatures and reduced insect pressure to increase yields. Earlier season estimates were in the 325,000 to 350,000 pound range.

“It was a really good growing season and a little bit cooler. It didn’t get above 100 degrees too often,” said Jeff Gibbons of Setton Pistachio. “It was the best growing season in 30 years.”

Jim Chuck Nichols of Nichols Farms added, “The nuts were huge this year; probably a full 30 percent larger than the year before. That made for the lion’s share of the crop increase.”

Craig Kallsen, University of California Cooperative Extension tree nut farm advisor, Kern County, says the record production is also tied to more acreage coming into production. In 2009, California pistachio acreage totaled about 126,000 bearing acres and about 83,000 non-bearing acres.

2010 California pistachio yields averaged a record 4,000 pounds/acre, about 300 pounds higher than the previous record. Leading pistachio counties include Kern, Fresno, Tulare, Madera, and Kings, according to the California Department of Food and Agriculture (CDFA). Three of the top five California agricultural export crops are tree nuts.

“For years we’ve talked about these large crops coming. Today is the day,” said Brian Blackwell, outgoing WPA board chair of Blackwell Farming Co., in Bakersfield, Calif. “Gone is the day when high production crops were 350 to 400 million pounds and low crops were 200 to 250 million pounds.”

Cochise County, Ariz., pistachio grower Jim Graham, owner of Cochise Groves, reports 2010 yields were his best ever.

“My mature orchards averaged more than 4,500 pounds,” said Graham, a former WPA board member representing Arizona. “A young orchard yielded about 1,600 pounds which was by far its best production ever.”

The pistachio tree is alternate bearing with higher “on year” production one year followed by a smaller crop the next year - the “off year.” 2010 was an “on year” in many areas. Yet in Kern County most orchards were in “off year” mode.

“2010 was a good off year,” Kallsen said. “We didn’t sink like we sometimes do.”

Pistachios poised to soar

Pistachio production is poised to soar in California with about 60,000 acres of trees expected to enter bearing production over the next three years, Blackwell says. About 16,000 acres of pistachio trees will shift from non-bearing to bearing status this year. In 2012, about 25,000 acres will enter the bearing fold, with another 19,000 acres in 2013.

“In a few short years these additional acres could add 200 million pounds of pistachios to a total potential (statewide) crop of 700 to 800 million pounds,” said Blackwell.

The WPA is a voluntary agricultural trade organization representing growers, processors, and industry representatives in California, Arizona, and New Mexico. WPA funding includes a voluntary assessment of a quarter-cent per dry in-shell pound plus $5 (voluntary) per acre for non-bearing acreage.

Matoian points to three promising signs for the U.S. pistachio industry: the recent record crop, the current ban on Iranian pistachio imports into the U.S., and increasing global demand for pistachios.

“The industry is poised for growth and forward momentum,” Matoian explained.

The U.S. Pistachio Conference focused heavily on marketing. Several pistachio marketers concurred that market development must precede increased pistachio production. To expand its marketing outreach, the WPA last fall hired Judy Hirigoyen as its global marketing director.

Major global markets for U.S. pistachios include China, the European Community, and India. Iran is the world’s largest pistachio producer followed by the United States and Turkey.

Tree nuts – almonds, walnuts, pecans, pistachios, and others – are gaining worldwide favor with consumers due to the nuts’ wide-ranging health benefits.

“The U.S. pistachio has surpassed Iran as the No. 1 supplier to China due to its high quality,” Robin Wang told the crowd to a round of applause.

Wang, director of SMH International, a China-based marketing firm, is working with the WPA to boost U.S. pistachio consumption in China. China currently imports more than 10 percent of world pistachio production. In the Chinese language, pistachio means “happy nut.”

As other Western tree nut industries can attest, China is a growing market. The country’s rapidly growing middle class is demanding higher quality food with more protein. China, already with 1.3 billion people, has one of the fastest-growing populations in the world.

More and more Chinese can afford tree nuts. Wang says China’s gross domestic product increased more than 10 percent last year. Urban household disposable income increased 11.3 percent. China is expected to become the world’s largest retail market by 2020. Wealthy Chinese buy one quarter of the world’s luxury goods.

The Chinese lifestyle embraces many Western world influences ranging from food to music. Starbucks coffee houses are abundant. A new KFC restaurant opens daily in China.

Wang says the top tree nuts consumed by Chinese include walnut, almond, hazelnut, and pistachio.

“Chinese consumers consider nutrition benefits, food safety, nutrition benefits, food safety, and a healthy lifestyle,” Wang explained. “They prefer to import food products.”

Imported food is preferred due to food safety breaches in China-grown farm products. Wang says Chinese consumers are concerned about overuse of pesticides in Chinese-grown vegetables. The plastic product melamine was found in Chinese-produced milk in 2008 which was linked to infant deaths and other physical complications.

“Chinese consumers have lost the confidence of ‘Made in China, ’” Wang said.

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