California's pistachio industry is all grown up.

It was little more than a cottage industry in 1979 when Iranian demonstrators took over the U.S. Embassy in that country. President Jimmy Carter imposed an embargo on Iranian trade.

California's fledgling, mom and pop pistachio industry was producing just 17 million pounds of the nut with the smile. Carter's embargo was like a new Christmas pony.

California pistachio growers mounted up and have been riding hard ever since to not only capture, maintain and grow the U.S. pistachio market held by the Iranians and voided by Carter, but they are marketing high quality California pistachios worldwide.

Their pony was hitched to a new cart in 1981 when growers voted to form their promoting and marketing arm, the California Pistachio Commission.

California pistachio growers produced more than 300 million pounds in 2002. Pistachios are an alternate bearing crop and tumbled to just 118,000 pounds last season. Weather had as much to with that as alternate bearing.

All California commodities have learned that to grow markets, there must be a reliable supply. Jim Frawley, CPC commissioner from Paramount Farms, Los Angeles, Calif., and chairman of the marketing committee said at the recent California Pistachio Industry annual conference that the industry learned that lesson the hard way in 1999 when it produced just 122 million pounds.

With that short crop, the industry ran out of product for distribution channels. “We said if we don't have it, we cannot sell it. That is not customer friendly.”

Carry-ins plan

Since then the industry has adopted a plan to make sure there are carry-ins from big crops to small crops. Evidence of that is the 2002 crop. The year the industry produced 302 million pounds, it marketed 188 million pounds. When the industry last season produced the smallest crop since 1999, it will probably sell 188 million pounds before the 2004 crop comes in.

The industry, said Frawley, has demonstrated a “willingness” to smooth out supplies by making sure there is sufficient inventory to satisfy customers when there is a short crop.

Transition is one issue the industry has owned up to. The next challenge will be to build market en route to a 450-million-pound crop in the not too distant future.

CPC will focus on growing the domestic market, but like all other California commodities, the reality is Americans can only eat so much of anything — even pistachios.

It is the export market that is gaining increasingly more focus as the industry continues to evolve from what some call “mom and pop” farms to large commercial operations and that 450-million pound crop.

CPC lobbyist Bob Schramm told the conference that the commission has done well in gaining new markets and avoiding getting caught up in the trade squabbles in Washington. It has also been successful in getting federal market access funds to grow overseas markets.

“Right now in Washington, national security and economists are controlling trade,” said Schramm. “It is all about giving American consumers the cheapest prices they can, including those for the 224 fruits, vegetables and nuts now produced in the U.S.”

Schramm did not mince his words when he said government economists believe any country that can supply products, even food, to the U.S. cheaper than it can be produced in the U.S. ought to be allowed to do it.

It does not matter if those countries want to dump it or subsidize it — it's OK with policymakers in Washington.

CPC, said Schramm, has fared well in that atmosphere, winning 13 unfair trade agreements with one pending. And CPC has been successful in keeping Iranian pistachios largely off the U.S. market since President Clinton lifted the embargo on Iran. However, tariffs remain high for Iranian pistachios, and Schramm is working to keep it that way.

At the same time, CPC is working toward 0 tariffs into other countries and to keep off California pistachios off retaliation lists in trade disputes.

e-mail: hcline@primediabusiness.com