The $2.20 per pound opening price for pistachios announced by Paramount Farms is a dime higher than the company’s initial offering last year for inshell nuts. Paramount is the world’s largest pistachios processor.

Growers could receive even more as the price is adjusted later in the marketing season to reflect supply and demand.

Paramount Farms added another 59 cents to the price it has paid growers for 2012 pistachios. That figure is expected to rise again, when the company announces its final price for the old crop in August, says Andy Anzaldo, general manager of grower relations for the Lost Hills, Calif., based company.

The 2013 opening price of $2.20 accounts for this year’s U.S. crop production. Paramount is forecasting a 550-million-pound off-year inshell crop. That’s nearly as much as last year’s record 555-million-pound on-year crop for the alternate bearing nut.

The 2013 estimate reflects that alternate bearing nature of mature trees and increasing production from new acreage, Anzaldo reports. Once pistachio trees start bearing at about sixth leaf, yields tend to increase annually until leveling off when the trees are 10 to 11 years old.

This is the second back-to-back on-year for some pistachio orchards in many of the West Side orchards in Kern and Fresno counties, Anzaldo notes. Elsewhere in the state, mainly Madera and Merced counties, orchards are in the normal off-year of their production cycle.

This year’s opening pistachio price also reflects a carryover of about 100 million pounds from last season. That’s about 30 million pounds more of old-crop pistachios than needed to satisfy demand early in the new marketing year, which begins Sept. 1, Anzaldo notes.

“For the 2012-13 marketing year, the industry will ship 470 million pounds,” he says. “So, a 550-million pound crop this year would be a perfect size to meet current demand. However, this demand did not come easy and is partly the result of Paramount's $100 million Get Crackin’ advertising campaign over the past four years. Another $27 million in advertising will be spent on Get Crackin’ this upcoming marketing season.”

While the amount of nuts growers harvest this year should be in line with the market, the 2013 crop may come up short on quality.

Anzaldo is concerned about continued high naval orangeworm (NOW) pressure. Last year, California growers lost 2 percent of their crop to NOW. Those production losses combined with $60 million.

NOW populations in almond orchards this year have been at record highs, he notes.Many of Paramount’s pistachio growers also have almond trees. When blocks of the two different trees are adjacent, NOW conditions in one are seen in the other. The pistachios are also more vulnerable to NOW damage after the almonds are harvested because the worms move into the later harvested pistachios.

“That plus this year’s high trap countsin pistachios makes us nervous about the potential NOW damage in pistachio orchards this year,” Anzaldo says.