With Pistachio Sanctions Gone, Will Iran Cut Into Growers’ Bottom Line?

Last year was a terrible season for the American pistachio industry, especially in California. Warm temperatures and the lack of water resulted in a loss of almost half the crop.

The industry hopes to recover this year, but growers across the country may have a different issue, a problem that stems from the lifting of sanctions against Iran.

Farmer Brian Blackwell manages over 10,000 acres of nuts on the southern edge of Tulare County in the Central Valley. He’s pruning a 47-year-old pistachio orchard near Delano.

“They just continue to grow bigger and bigger and bigger,” says Blackwell. “Every year we come through and we prune them. When you prune the trees back, the circumference on the trunk continues to get larger and larger.”

Most American pistachios are grown in California, but until about 30 years ago most of the nuts came from Iran. They’re one of the country’s main non-oil exports, sold in large quantities to places like China. The American pistachio industry didn’t boom until an embargo was put in place on the Iranian nut as a result of the Iran hostage crisis. Jim Zion, with Meridian Growers, markets 60 million pounds of nuts annually in Clovis. He says this opened the door for the U.S. pistachio market to flourish.

“An average consumer, they would see an American pistachio and an Iranian pistachio, and they’re going to say, ‘Yeah, there’s something different,’” says Zion. “Ours tend to be round, theirs tend to be a little more long.”

In early January, sanctions against Iran including those on pistachios were lifted. That has lots of people asking questions about what this means for the American pistachio industry. Farmers keep calling Zion, worried that the lifting of sanctions will flood the U.S. market with foreign nuts.

“We’ve had a lot of growers calling asking and I said, ‘It’s the way the world is,’” he says.

Zion doesn’t think farmers should fret yet over the decision. “I’m not that concerned, to be honest,” he says. “It doesn’t matter whether I sell this product to someone in Chicago or someone in Singapore. It’s all the same for me.”

But grower Brian Blackwell is concerned it would hurt the farms he manages crops for.

“If they’re bringing in product for less than what we can grow it for and we have to compete in the marketplace, at least here in United States, then that means product is going to be sold at a lower price. And therefore the processors and marketers are going to give growers a lower price,” Blackwell says.

Right now U.S. pistachio growers enjoy protection. In 1986 they lobbied for a 300 percent tariff on the nuts imported from Iran. Now with sanctions lifted, that means even though Iran can legally sell the green nut to American retailers, it will cost consumers up to three times as much. Zion says this tariff is in place because the Iranian government subsidizes the country’s pistachio industry.

“It was making it a very unfair competition,” says Zion. “That duty is put into place to make it level. And all people want, especially growers, is just a fair and level playing field. We fully expect them to go ahead and challenge that at some point.”

The day that the shelves are well stocked with Iranian pistachios could be coming sooner than expected.

Richard Matoian, with American Pistachio Growers in Fresno, says Iranian farmers will likely try and prove they’re not subsidized by their government as soon as this summer in a meeting with the U.S. International Trade Commission.

“We’re gonna go in and we’re going to defend our position. And the government of Iran will have to present the facts in their case regarding the continuance of those tariffs,” Matoian says.

Even if the tariff is lifted, Matoian says American pistachios are a higher quality and safer crop. He says the U.S. nut has fewer incidents of a problematic fungus that can make people sick.

“If you think about our food safety standards imposed by the state and the federal government, we grow our product at a higher level of food safety,” says Matoian.

For now, California pistachio growers don’t have to worry about Iran. In the Central Valley farmers are watching the weather, and are busy prepping for what they hope will be a larger harvest later this year.