Economy, Business And Markets

US Pistachio Growers Worry at Iran Competition

US Pistachio Growers Worry  at Iran Competition US Pistachio Growers Worry  at Iran Competition

Last year was a terrible season for the American pistachio industry. Warm temperatures and the lack of water resulted in a loss of almost half the crop, and profits were down by around $1.4 billion from 2014.

This year, the industry is hoping to recover, but growers across the country may face a different issue: competition stemming from the lifting of sanctions against Iran, The US National Public Radio wrote on its website.

Iran is historically known for its pistachios. They’re one of the country’s main non-oil exports, sold in large quantities to places like China. Until about 30 years ago, a large amount of the pistachios sold in the US were from Iran.

The American pistachio industry did not boom until an embargo was put in place on the Iranian nut after the 1979 Islamic Revolution in Iran.

Jim Zion, with Meridian Growers in Clovis, Calif., says this opened the door for the US pistachio market to flourish.

“An average consumer, they would see an American pistachio and an Iranian pistachio, and they’re going to say, yeah, there’s something different,” Zion says. “Ours tend to be round; theirs tend to be a little more long. Almost in every other market around the world, we compete with them on a day-to-day basis.”

In mid-January the sanctions against Iran, including those on pistachios, were lifted after Iran reduced the scope of its nuclear program. That has lots of people asking questions about what the change will mean for the American pistachio industry. Farmers keep calling Zion, worried that Iran will flood the US market with foreign nuts.

“We’ve had a lot of growers calling, asking. And I said, ‘It’s the way the world is’,” says Zion, who markets around 60 million pounds of pistachios, almonds and pecans on behalf of US farmers annually.

  Protectionist Measures

Back in 1986, the US pistachio industry successfully lobbied for a 300% tariff on Iranian pistachios. Thirty years later, that means that even though Iran can now legally sell the green nut to American retailers, consumers will have to pay three times as much for Iranian pistachios as they do for US-grown ones.

This year, many of the pistachios grown in California’s San Joaquin Valley are missing the green, fatty meat that nut lovers crave. Instead, they’re empty inside, the result of drought, heat and weather pattern changes that have messed with pistachio tree fertilization.

In Tulare County, Calif., Brian Blackwell manages more than 10,000 acres of nuts. Blackwell says if Iranian pistachios were allowed into the US, it would hurt the growers whose farms he manages.

“If they’re bringing in product for less than what we can grow it for, and we have to compete in the marketplace, at least here in the United States, then that means product is going to be sold at a lower price. And therefore the processors and marketers are going to give growers a lower price,” says Blackwell.

For now he’s safe, but Blackwell realizes this tariff may not be in place forever. And if it’s ever lifted, that would mean it could become harder to sell his crop. Even so, he says he’s not sure the industry would be hurt all that bad.

“This is a global market nowadays,” says Blackwell. “So if Iran brought a million pounds of pistachios into the United States, that just means there’s a million pounds out there somewhere that didn’t get sold in China or Europe”—a million pounds that US growers could sell to these places instead.