Valley Public Radio - Live Audio

With US Sanctions Lifted, Why Aren't Iranian Pistachios Back?

Feb 16, 2016

Last year was a terrible season for the American pistachio industry. Warm temperatures and the lack of water resulted in a loss of almost half the crop, that’s around $1.4 billion less than 2014. This year the industry is hoping to recover, but as Valley Public Radio’s Ezra David Romero reports growers across the country may have a different issue later this year, a problem that stems from the lifting of sanctions against Iran.

In 2015 the the pistachio industry had a terrible year. Warm temperatures and the lack of water cut in the total yield in half.
Credit Courtesy of Brad Spry / https://creativecommons.org/licenses/by/2.0/legalcode

Iran is historically known for their pistachios. It’s one of the country’s main non-oil exports sold in large quantities to places like China. Until about 30 years ago most of the pistachios found in the US were from Iran.

The American pistachio industry didn’t boom until an embargo was put in place on the Iranian nut because of the Iran hostage crisis. Jim Zion, with Meridian Growers in Clovis, Calif., says this opened the door for the US 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,” Zion says. “Ours tend to be round, there’s tend to be a litter more long. Almost in every other market around the world we compete with them on a day to day basis.”

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

"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."
Since the sanctions were first put in place the US pistachio industry has taken off.
Credit Ezra David Romero / Valley Public radio

“We’ve had a lot of growers calling asking and I said, ‘It’s the way the world is,’ says Zion who markets around 60 million pounds of pistachios, almonds and pecans on behalf of farmers annually.

He doesn’t think farmers should fret yet over the decision.

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

"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." - Richard Matoian

That’s because the US pistachio industry lobbied for a 300 percent tariff on Iranian pistachios in 1986. Thirty years later that means even though Iran can now legally sell the green nut to American retailers it will cost consumers 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,” Zion says. “That duty is put it 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.”  

To understand why this tariff is important we head to the southern edge of Tulare County where Brian Blackwell manages over 10,000 acres of nuts.

He’s pruning a 47 year old pistachio orchard near Delano for the approaching bloom in March.

“They just continue to grow bigger and bigger and bigger,” Blackwell says. “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.”

Blackwell says if the subsidized Iranian pistachios were allowed into the US it would hurt the growers he manages farms for.

Brian Blackwell says growers shouldn't worry too much over the lifting of sanctions against Iran.
Credit Ezra David Romero / Valley Public Radio

“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,” says Blackwell.

"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." - Richard Matoian

For now he’s safe, but Blackwell realizes this tariff may not be in place forever. And if it’s ever lifted that would mean it could become harder to sell his crop. Even still he says he’s not sure the industry would be hurt that bad.

“This is a global market nowadays,” says Blackwell. “So if Iran brought a million pounds of pistachios into the United States that just means there’s a million pounds out there somewhere that didn’t get sold in China or Europe.”

The day that the Iranian pistachio hits the American market could be coming sooner than expected.  Richard Matoian with American Pistachio Growers 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,” says Matoian.

Even if the tariff is lifted and foreign pistachios come into the country, Matoian says American pistachios are a higher quality crop than the foreign nut.

“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,” Matoian says. “We grow a superior product.”

For now American pistachio growers don’t have to worry about Iran, they’re busy prepping for hopefully a heartier crop harvested later this year.

Tags: