Funerals are emotional, and services held for the California Pistachio Commission (CPC) had more than a few gasps and moans mixed with tears.
In delivering a eulogy for the CPC at the final California Pistachio Industry conference at Monterey, CPC Board Chairman Kevin Herman of Madera, Calif., and Karen Reinecke, CPC president for the past 23 years, said it was time to move on following the death of the commission in a grower referendum earlier this year.
Tears were shed for the commission's passing, but the gasps and moans were for the future of the industry outlined in frightening detail by a well-respected economist.
Many chose not to buy into USDA Economist Edmond Missiaen's prognostication for the future because it was so gloomy.
Missiaen, now a private consultant, projected that California pistachio acreage will increase by 50 percent in just the next three years and the total supply available for market in seven years will be more than four times the sales projected for 2014.
CPC is responsible in large part for this explosive growth and excellent recent crop returns for growers, a result of its success in promoting the consumption of California pistachios worldwide. But that success stands to come back and haunt an industry now without a unified marketing and promoting voice.
CPC has been the motor driving the California pistachio industry for almost three decades. Now, that motor on the boat carrying all growers and marketers is dead, and the industry seems to be headed for an unavoidable ride over Niagara Falls.
After one large farming operation killed the mandatory CPC , the industry has quickly initiated efforts to create voluntary organizations to fill the void.
Although two-thirds of California pistachio growers voted to continue the 26-year-old CPC, it is going out of business within six months because Los Angeles billionaire Stewart Resnick and his Paramount Farming Co. apparently decided they didn't need CPC.
While a majority of growers voted to continue the commission, they grower represented only 41 percent of the voted volume. By law, to continue the commission, those approving it must represent 50 percent of the volume.
Paramount controls 25 percent to 30 percent of the state's pistachio production and its vote against the commission killed it. About 65 percent of the state's pistachio producers cast ballots.
What lies ahead?
Missiaen says from 1981 to 2004 new plantings went in at a rate of a bit less than 9,000 acres per year. That has accelerated over the last three years as pistachio profitability improved considerably. Almost 16,000 acres were planted last year; 20,000 are projected to this year; and similar figures are forecast in 2008 and 2009, based on information Missiaen received from nurseries and other sources.
This means, he says, there will be 213,000 bearing acres in California in seven years — 100,000 acres more than today.
Mature pistachio trees are alternate bearing, but young trees are less so until about the 10th leaf, when they are considered mature and more alternate bearing.
Using formulas for both types of trees, the former deputy director of the Foreign Agricultural Service Horticultural and Tropical Products Division, estimated by 2013, the crop would total 550 million pounds. In 2006, it was 237 million pounds; the record to date was 347 million pounds, produced in 2004.
The biggest year for domestic shipments of California pistachios was 2004, when 140 million pounds were shipped. The top season for exports occurred the same year, when 120 million pounds were shipped.
Projecting a 5 percent growth rate for exports and 3 percent for domestic shipments to 2013, there could be a carry-in for 2014 of as much as 900 million pounds — three times projected yearly sales.
Combined with a projected production of about 400 million pounds in 2014, the available supply is expected to be more than 1.2 billion pounds, against a projected 300 million pounds in sales.
By comparison, the carry-in for 2006 was about 300 million pounds; for 2007 it was about 200 million pounds; and for 2008, it is estimated to be about 300 million pounds.
The murmuring when Missiaen finished his prophesy of doom was interrupted by a man who stood and said, “There are a million more people in the world each day, and they will eat pistachios.”
He drew a laugh, but the economist's outlook was no joking matter at the “funeral” for the California Pistachio Commission.
Reinecke says the road ahead for the industry without the commission “may not be where you want to go — but it is the road ahead,” fraught with unparalleled challenges and opportunities.
California pistachios are sometimes called “the smiling nut.” No one who produces them was smiling at the close of the funeral services for the California Pistachio Commission.