As American pistachio growers prepare for the start of a new season, the engine of production that has contributed to their success in selling their product around the world appears to be on the verge of losing some steam this year. Blame limited supplies of water to grow the crop.

In California, which produces most of the country’s pistachios, about 40 percent of the state’s pistachio acres are in water districts expected to receive no deliveries of federal or state surface water this year. Here and elsewhere in California, the third straight year of below normal precipitation has left supplies of groundwater in doubt as well.

“Water is going to play a critical role in the size of California’s pistachio crop for this and the next several years,” says Richard Matoian, executive director of the American Pistachio Association, based in Fresno, Calif.

 

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Continued strong demand, both at home and abroad, pushed the wholesale price of pistachios above the $5 per pound (in-shell last summer. That was following expectations that the 2013 pistachio crop would come in 16 percent under earlier projections. Since then, wholesale prices have remained above $5 per pound.

If growers are unable to provide all the water their trees need, the likely result would be smaller nuts and a lighter crop. Given the current level of demand, a smaller pistachio harvest this year would be expected to keep prices up. Whether that’s enough to offset the impact of a smaller crop on grower returns, remains to be seen.

“I’ve heard of some water being sold this year at prices as high as $1,300 per acre-foot,” Matoian says. “And, for growers with wells, pumping more water will add to their costs. Some growers tell me that water, alone, will account for half of their total production costs this year.”

 

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A continued shortage of water would likely slow the rapid expansion of California’s pistachio industry, which now counts 300,000 acres of planted trees. Some 30 percent of these trees have yet to start bearing a crop.

Last year, California growers harvested 475 million pounds of pistachios. That follows the record 555-million-pound crop in 2012. “We were expecting to produce our first 1-billion-pound crop within the next four to six years,” Matoian says. “Now, it looks like that will be pushed back a little bit.”