Any prediction at this time about the size of California’s 2009 pistachio crop, of course, is still a crapshoot. Water worries are weighing heavily on the minds of many growers who are concerned about the impact of short water supplies on their ability to hold production and quality through harvest. In addition, some are dismayed by the weak bud wood they’re seeing in their orchards. Others are heartened by the sight of a tremendous bud set on some of their trees.

Meanwhile, there’s reason for optimism on the price side. The worldwide industry started this year with about 30 percent to 35 percent less supply than in 2008,” reports Jim Zion, managing partner of Meridian Nut Growers in Clovis, Calif. This has helped strengthen pistachio prices, currently in the range of $3.20 to $3.50 for wholesale roasted and salted nuts, compared to almonds and walnuts.

The recent weakening of the dollar is adding to the attractiveness of pistachios in the European market, which buys about 30 percent of U.S. production. The worldwide economic downturn could dampen price prospects. So far, so good. While demand here at home is off a little, he points out, exports have been fairly strong.

“The big unknown in terms of price is Iran,” says Zion. “We’re hearing that the severe frost which hit orchards there last year probably cut production. It’s doubtful that growers can produce the big crop that they originally expected.

“The overall inventory levels of California’s 2008 crop will be very manageable,” he says. “Typically in the past, the state’s growers have produced about 425 to 475 million pounds annually, leaving about 75 million pounds to carry over into the next year. In 2008, production totaled about 350 to 375 million pounds."

No matter how beneficial a shortfall in production might be on prices in the short run, it could spell trouble for the future. “That would not allow for growth in the market,” he cautions. “The industry is trying to move the demand needle up. But, you also need to have product to meet an increased demand. If you don’t, buyers in the long run find something else.”