That’s what the California wine industry thought after a 1991 "60 Minutes" broadcast that attributed France’s low rate of heart disease to red wine consumption.

And, we all know what has happened to California’s wine industry. Consumption increased but not as rapidly as new plantings. The industry eventually descended into one of its deepest economic troughs ever because of an oversupply of wine grapes.

In July, the U.S. Food and Drug Administration (FDA) approved a much-awaited qualified health claim for nuts and heart disease prevention for immediate use on food labels in response to a petition filed by the International Tree Nut Council's Nutrition Research and Education Foundation.

It is easy to draw a parallel between the FDA announcement and the French Paradox, but that may be where the similarity ends. For one thing, California almonds, walnut and pistachio producers are a bit more prosperous than the wine grape industry was when the French Paradox exploded wine awareness.

Phenomenal growth

For one thing, the king of the California nut crops, almonds, are enjoying an phenomenal growth in not only production but consumption as well.

Dan Cummings, a Chico, Calif., almond grower and former vice chairman of the Almond Board of California, told the recent 22nd annual Agribusiness Management Conference in Fresno, Calif., that the industry shrugged off back-to-back one billion pound crops with four years of record shipments and a 55 percent improvement in grower field prices in that same period.

"Years of fretting over the impending one billion pound crop after record new plantings in the mid to late ‘90s were cast aside" by incredible increases in almond shipments.

Almonds are now California’s largest agricultural export with more than 80 percent of the world’s supply produced in the Golden State. Seventy percent of the state’s crop is exported.

Changing production practices — more trees per acre, improved irrigation technology and variety selection — have reduced production volatility and assured the marketplace a constant, large supply almonds.

Primary production areas continue to shift west to south. Almost half of the state’s almond production is south of Madera, Calif., where bloom time weather in late February is more favorable for pollination.

Bearing acreage should remain relatively constant at 530,000 acres of trees for the next few years, said Cummings, as trees planted in the last three years offset aging acreage being pulled out.

However, most commercial nurseries are sold out for 2004 and 2005 plantings at number comparable to the mid-1990s.

"This means another surge of plantings on the order of 35,000 acres per year," he said.

The industry has seen a compounded growth rate of 9.2 percent annually over the last five years and there are no signs of it slowing down. Cummings predicts California will remain the dominant global producer.

Almond prices "should be profitable over the next few years," Cummings predicts. However, new plantings will put downward pressure on prices and planting will slow.

Walnuts

California walnut growers will produce a record crop this season, 315,000 tons, 3.3 percent greater than the 305,000 tons produced in 2001, according to Cummings.

California is the world’s second largest walnut producer (36 percent) behind China with 44 percent.

Over the last decade, Cummings said there has been a dramatic decrease in early harvesting varieties like Ashley and Payne that can be directed to the in-shell market.

California walnuts are sold 25 percent in-shell and 70 to 75 percent shelled walnut meats. Eighty percent of in-shell production is exported, primarily to Europe.

New premium shelling varieties coupled with improved technology to remove walnut meats has lead to increased ingredient sales and shipments to foreign markets.

In the last 10 years, almost 82 percent of the new acres have been to Chandler, Howard and Tulare varieties. These are quick to mature, produce large crops of high quality and are considered the premium, shelling varieties due to their high meat yields.

"Walnuts are moving beyond the traditional bakery segment and into such diverse categories as cereal, ice cream and snack foods," said Cummings.

This is opening up export markets. Japan has historically been a non-user of walnuts, but Cumming said Japan has become the largest importer of California walnuts. They are used in "everything from traditional dishes to high-end bakery products in the finest European tradition."

Cummings predicts only a modest increase in acreage in 2004 from the 205,000 bearing acres this season. However, Cummings expects total production to increase for several years with the shift in varieties.

Prices are in the 50-cents per pound range and will likely remain there for in-shell walnuts. Chandler prices have leveled off to the 60-65 cents range. Serr, Howard and Tulare premium shelling varieties are in the mid to upper 50-cent range with the balance of shelling stock selling for 40 to 50 cents per pound.

"Increasing grower revenues will be primarily accomplished by higher yields per acres, and younger orchards with the newer varieties will enjoy a substantial advance over much of California’s older, established walnut orchards," Cummings predicted.

Pistachios

This is an off year for pistachio production. The California Agricultural Statistical Service is projected a 180 million pound crop with 80 percent of that open shell.

However, growers are questioning that estimate because of insect damage.

That compares to last year’s record of 302 million pounds.

Pistachio acreage now totals 111,000 acres with 23,000 non-bearing.

So far demand has kept up with production, thanks to the efforts to balance supplies between off and on production seasons and aggressive promotion efforts. This has stabilized grower returns as crop size more than doubled between 1991 and 2002.

e-mail:hcline@primediabusiness.com