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Pistachio growers face vote to expand industry oversight

Jennifer Collins Oct 3, 2011

Pistachio growers face vote to expand industry oversight

Jennifer Collins Oct 3, 2011

Adriene Hill: Today growers of pistachios are voting on whether to increase industry oversight. The thinking is it could make these little green nuts more attractive to overseas importers, and expand the market for pistachios abroad.

Jennifer Collins reports on the little nut that cracked its way into a billion dollar industry.

Jennifer Collins: Horizon Nut Company in California’s Central Valley hulls, cleans and sorts almost 10 percent of the U.S. pistachio crop every year.

J.D. Franklin: What we’re looking for is an unstained as bright as white or cream colored shell as possible.

J.D. Franklin is the head of operations. And every so often he does his own quality control checks.

Franklin: Heavenly.

That “heavenly” taste can take at least six years. But when the trees mature, they produce for decades. Jim Zion, of a grower cooperative, says that’s attracted unlikely financial backers.

Jim Zion: The stock market obviously is not a place to go. And so you have seen some retirement funds coming in.

And partly that’s because —

Bob Klein: The return on pistachios has been quite good.

Bob Klein oversees pistachio production in the U.S. By some accounts, investors can triple their money in 20 years. Klein says those returns have created a nutty situation with the largest processor in the industry, Paramount Farms. Maybe you’ve heard its tag line?

Ad: Get Crackin’.

Klein says Paramount split from a trade group a few years ago — over marketing disagreements.

Klein: The large processor said, ‘Well, we pay the bulk of the assessments so we should have more “say” than we currently have.’

Now, Paramount pays the bulk of the advertising — reportedly $30 million a year. This fall, the smaller producers ramp up their own campaign. They spend about $5 million on promotions here and overseas.

Klein: Each side would say the other was irrational and illogical.

But Klein says the rivalry may be a good thing in the long run.

Klein: Anything that puts pistachios in people’s minds will make them more likely to buy.

And with the crop potentially doubling in a few years, he says there’s about to be a lot more pistachios for people to buy.

I’m Jennifer Collins for Marketplace.

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