- 17 hours ago
It took California a century to produce a pistachio harvest. Now, it's the world's top supplier. But as the Dubai chocolate trend fuels demand, and California droughts intensify, growers are fighting to keep up.
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00:01California grows 99% of America's pistachios,
00:06even though the crop isn't native.
00:09This year, U.S. farmers expect another record harvest,
00:13and they're racing to keep up with new demand,
00:16fueled by the Dubai chocolate craze.
00:20But trying to supply all these nuts
00:24is getting harder than ever
00:27because pistachio trees need a lot of water,
00:30about twice as much a year as tomatoes,
00:33one of the state's other top food crops.
00:36California doesn't just produce the majority of the nut crop.
00:40California produces the majority of the fresh fruits and vegetables in the country.
00:44They're not being prioritized right now.
00:46And as droughts get worse,
00:48the state is tightening its water supply,
00:51threatening farms and businesses.
00:53As a smaller grower,
00:54my mindset needs to be on how we can survive.
01:00We visited the world's largest producer
01:03to learn how despite the challenges,
01:05they've managed to keep expanding,
01:07with orchards that could blanket Manhattan four times over.
01:11Because we planned ahead,
01:12after a while you get pretty good at it
01:14because it's not if a weather event will happen,
01:17it's when the weather event happens.
01:19So how did farmers build a multi-billion dollar pistachio industry
01:24in some of America's driest counties?
01:27And as water supplies grow even scarcer,
01:30which crops will survive?
01:37Pistachios aren't native to California.
01:39Their origins can be traced back to Central Asia and the Middle East,
01:43where people have eaten them for millennia.
01:46The region has a climate similar to California's,
01:49with mostly dry summers.
01:51These plants have always been picky,
01:53so big harvests were hard to cultivate even in their native land.
01:57Pistachios were regarded as a luxury,
02:00mentioned in the Bible as one of the choice fruits of the land.
02:03Around 330 BC,
02:05Alexander the Great conquered the Persian Empire
02:07and brought the nut to the Mediterranean.
02:09Pistachio farms began popping up in Italy and Spain,
02:14and by the 1800s, in France.
02:16A seed distributor named Charles Mason
02:19brought the first pistachio nuts to California in 1854.
02:23In the years that followed,
02:25many tried to cultivate trees here,
02:27but they didn't take well to California soil
02:29and barely produced nuts.
02:31However, the US Department of Agriculture
02:33liked that pistachio trees could survive droughts.
02:37So, in 1929,
02:39it sent its botanist to Iran
02:41to find more productive seeds.
02:43He brought back thousands,
02:45and eventually, one thrived.
02:47He named it Gediman after the Persian province it came from.
02:50Over the next century,
02:52an entire industry grew in California
02:54from that single Iranian seed.
02:56Today, some of the oldest pistachio trees in the state
03:04can be found at Kenan Farms.
03:06They were planted before 1972.
03:10The industry was almost literally non-existent.
03:15Bob Kenan and his father Charles
03:17started farming pistachios on just 100 acres.
03:21Nowadays, the family gathers nuts from 20,000 acres.
03:25My father and I would laugh,
03:27going, can you imagine we'd ever be something like that?
03:34To grow this many nuts,
03:36they need fast machines.
03:39Like these,
03:40that can shake off as many as 15,000 pistachios
03:43in just five seconds.
03:46Only trees with long, healthy roots
03:49can withstand the force.
03:51They're so big that sometimes
03:53it's even hard to shake them
03:55because they're just such a large trunk.
03:56It takes so much force and energy.
03:59Zach Raven oversees the harvest.
04:02That kind of just tells you they're ready right there
04:04when that hole, we call, slips right off.
04:07It takes about seven trees to fill one bin.
04:11The goal is to process 130 of these trailers
04:14by the end of the day.
04:19And this goes on for eight weeks.
04:22Pistachios are one of the most expensive nuts to grow.
04:27Farmers can spend about $20,000 per acre
04:30before a single pistachio is produced.
04:33You're putting so much investment in watering it,
04:36giving it nutrition, pruning it.
04:38It's a risk.
04:39It's a gamble for all growers.
04:42And it takes six years for these trees to produce nuts,
04:46twice as long as almonds.
04:48That's a long time with not getting anything in return as a grower.
04:54Unlike other nuts, which produce both male and female flowers in a single tree,
05:00pistachio plants have just one or the other.
05:03Only the females produce the nuts.
05:06The crop needs plenty of water during the summer to yield a big harvest.
05:11One acre takes more than a million gallons of water.
05:15That's enough to supply 10 households for a year.
05:19It's always about timing when it comes to these trees,
05:22giving the right amount of water at the right time.
05:25Throwing off this balance can leave up to half the pistachio shells empty.
05:31A lot of them are blanks.
05:34And there's a blank right there.
05:37Kenan's first commercial harvest in 1976 was just 500 pounds.
05:44Today, the company produces millions,
05:47more than the entire state's first industrial harvest in the mid-70s.
05:54Back then, Iran still dominated the industry,
05:57exporting 20 million pounds of pistachios a year to the US.
06:02But things started to change after 1979.
06:07Several hundred Iranian students seized and occupied the American embassy in Tehran.
06:12They held 52 American workers and diplomats hostage in what's known as the Iranian hostage crisis.
06:21In response, the US restricted imports on Iranian pistachios.
06:27That opened up a market for California growers.
06:31A lot of like-minded farmers invested their time and energy and resources into building an industry.
06:40Day by day, year by year, we learned a little bit about the processing, which was new to California.
06:48In 1980, the state grew 27 million pounds of the nut.
06:53But a year later,
06:55Iran released the American hostages.
06:59And the US lifted its embargo on the country's pistachios.
07:03Iran started shipping nuts to the US again.
07:08We couldn't face those types of competition, so we had our lobbyists and lawyers do some work.
07:18Kenan Farms and a few other growers petitioned the government to launch an investigation into Iranian imports.
07:25The US International Trade Commission found Iran was selling pistachios for less than they were really worth,
07:31even cheaper than it cost to grow them.
07:34It's a strategy known as dumping, pricing goods below cost to squeeze out rivals and gain market share.
07:42In 1986, the US slapped a 241% tax on pistachios from Iran, a tax that holds to this day.
07:51And that helps our industry grow and become profitable.
07:55By then, the Kenans already had their first machine, designed specifically for pistachios, called a Huller.
08:03At the time, they hand-fed it.
08:06Today, it's automated.
08:08Water softens the skins, so they come off without damaging the shells.
08:13Once they're dry, Kenan stores the pistachios in these silos.
08:18The big ones each hold up to 2 million pounds worth.
08:23These windows give you an idea of how full they are.
08:29Hear that good, solid sound?
08:32Solid pistachios.
08:33Yeah, it's nuts.
08:35And all those nuts have to get processed.
08:40That's where Bob's son, Mitchell Kenan, takes over.
08:44Morning.
08:45We can store about 10 million pounds inside this total warehouse here.
08:49How many pistachios?
08:52Individual pistachios.
08:53Oh my God.
08:5525 times 16.
08:58That was 2 million.
09:01Maybe 4 billion nuts.
09:04Somewhere around there.
09:05It's a lot of pistachios.
09:09First, computers scan for rotten pistachios.
09:13We try to look for any kind of sticks or rocks that might have made it into the product.
09:18No consumer wants to have insects in their product.
09:21The sorted nuts go for a ride through these tubes, which move them to their next station.
09:27It's basically a replacement for a conveyor belt.
09:31Kind of the modern way of transporting nuts now.
09:36Next, they are sorted by color into 5 different shoots.
09:42Then, these workers go through the pistachios again to look for defects.
09:47If the nuts make the cut, they'll go here to get sized.
09:51Pistachios range from, you know, really tiny pistachios to big stuff.
09:56The average consumer wants an average-sized pistachios.
09:59The smaller nuts, as well as the closed and dark ones, are sent to the sheller.
10:04This is where the closed shells turn into kernels.
10:08But they have to sort these kernels, too.
10:11And that's trickier.
10:13A lot of the defects can blend in, like right here.
10:17That's called spotting, so that's a defect right there.
10:21About 60% of Keenan's business comes from outside the U.S.
10:25This product's going to India.
10:27So they're going to take the product and they'll actually roast it there.
10:31The company packs and ships about 25,000 boxes on an average day.
10:36It's crunch time right now.
10:42Forty miles south, the world's largest pistachio grower,
10:46the wonderful company, farms the nut on 60,000 acres.
10:51An area about twice the size of San Francisco.
10:55I am out here generally a couple times a week.
10:59Rob Raceborough runs Wonderful Orchards for its owners,
11:02the Beverly Hills billionaires Stuart and Linda Resnick.
11:06I started out as the Resnick's banker.
11:09And so I financed their first purchase of a pistachio orchard in 1986.
11:15Stuart said, well, this is a fantastic product,
11:18but the U.S. consumer is unaware of its health benefits.
11:22And so he took it upon himself to introduce consumers to a new product.
11:26At that time, I certainly didn't.
11:28And I doubt the Resnicks ever thought that they would become
11:31the largest pistachio grower in the world.
11:34In the early 90s, California's entire pistachio harvest grew on just 50,000 acres,
11:41smaller than Wonderful's orchards today.
11:44By then, the Resnicks had reportedly captured
11:47about half the state's pistachio market.
11:50Some trees produced many more than 13,000 nuts,
11:53and some trees didn't produce as many.
11:56So they said, let's see if we can identify these trees
11:59that produce so much better than the rest.
12:02We can clone those trees.
12:04Then about 10 years ago, we had successfully perfected the process
12:09to replicate those trees and to grow those.
12:12And we started planting those in a big way.
12:16Today, Rob says Wonderful's trees produce 20 to 40 percent more nuts
12:21than the average pistachio tree, using the same amount of water.
12:25Now, the company handles about 800 million pounds of the nut per year.
12:31That's more than 500 times California's first industrial harvest.
12:37Rob says they don't leave it up to chance.
12:40This is California.
12:41There's going to be periods of drought.
12:43Let's plan ahead.
12:45Let's make sure we have the water.
12:47Early farmers in Southern California soon discovered that the soil
12:54quickly dries to dust during dry spells.
12:57For hundreds of years, farmers in the arid South looked for ways
13:02to water their crops.
13:04In California, the fundamental water problem or puzzle is that
13:11most of our water is in the north of the state.
13:14Most of the demand is in the south.
13:17So, in the 1950s, the state pitched a massive new water delivery system
13:23called the State Water Project, which would pull water from Northern California.
13:29But districts could only access this new system if they paid the state back for construction.
13:36Voters approved the project in the 1960s, and California began building.
13:42With hopes of more water coming their way, farmers began planting more crops.
13:59Including what are called perennials, like pistachio trees,
14:03that don't need to be planted annually.
14:06They can survive droughts, but to produce a harvest that's profitable,
14:11they need a lot of water.
14:13Otherwise, that loss is, you know, millions of dollars depending on the size of your ranch.
14:19If we have to keep watering them, we can't stop because the financial outcome would be just too huge.
14:25But farmers soon learned the state had been overly optimistic,
14:30estimating that the project could deliver up to 4.2 million acre-feet of water per year,
14:36when it would eventually supply much less than that.
14:40The state couldn't build every canal it had originally planned.
14:44And other regions already had contracts to pull from the same rivers.
14:49We also have water rights holders that have obtained their water right before 1914,
14:55when we actually started keeping track of it.
14:58Meaning, they will take their share out first.
15:01New environmental rules enacted in the 1970s and recurring dry spells also limited how much water the state could transport south toward farms.
15:12That was an issue for places like Kern County, where millions of nut trees were maturing in the early 90s and needed water.
15:20With the expansion of perennial tree crops, we've created this problem that we're up against.
15:26Then, one of the longest droughts in California's history, from 1987 to 1992, made the problem even worse.
15:35Water shortages resulted in a cut of up to 50% to agriculture.
15:41In the early 90s, the state stopped water deliveries to Wonderful, which relied entirely on that supply for about half its crops.
15:50Many growers in the area turned to the aquifers to keep their trees producing.
15:56The aquifers exist in layers, right?
16:00So you can think of like shallow, medium, deep.
16:03Once the shallow is overpumped, the farmers with resources go down.
16:09So the other major impact of overpumping is that domestic wells that serve people's homes and local businesses, they run dry, right?
16:19And then you're talking about people with no access to water.
16:22That's been a huge issue.
16:24But even farms, including Wonderfuls, couldn't pump what they needed because groundwater supplies were low in large parts of Kern County.
16:35That's where California was exploring a new water bank that would capture excess rainwater from across the state and store it underground.
16:45But the project stalled for years.
16:48They eventually found a path forward.
16:51A new entity called the Kern Water Bank Authority would take control.
16:56It was made up of local water districts, agencies, and a private company owned by the Resnecks who gained about 57% control.
17:05According to Wonderful, it earned this share by paying off part of the $50 million it says was still needed to get the bank running.
17:14And by giving up some of its water deliveries, which the company says would be worth over $170 million today.
17:22In the 90s, very few people wanted to give up entitlement to take this risk on an unproven concept of banking water.
17:30Stuart Resnick said, OK, I'll take a chance.
17:33The investment paid off fast.
17:36The company, whose pistachio crop was about 250 times the size of most growers, now had access to a system that could store billions of gallons of water in rainy years.
17:48And as luck would have it, in the mid-90s, California logged some of its wettest years on record.
17:55We've always said, let's not max this out.
18:00Let's always make sure we have enough resources that we can be sustainable when dry periods come.
18:05Many still object to Wonderful's outsized share, because court documents indicate that the state had already invested around $74 million to develop the bank, partly using residents' water bills.
18:22And now, the main stakeholder is a private company.
18:26It's public water that we've paid for that, in times of plenty, should be stored for the public, for the people.
18:37There are players in the system that have a disproportionate level of power.
18:44The Resnicks are not the only such private interests involved, but they happen to be the largest ones.
18:52That's stirred up a century-long debate.
18:55Should water rights be privately controlled?
18:58Do you think it's ethical?
19:02I think it's important that people always have water.
19:06There's been a lot of misinformation about the Kern Bank, especially during state emergencies.
19:12With regard to the wildfires in LA earlier this year, for example, LA gets its water from a completely different source,
19:21but it has absolutely no connection to the water that the wonderful company owns or controls in Kern County.
19:28That's because there's no direct infrastructure to quickly move the water from the Kern Bank to where firefighters needed it.
19:36But the Department of Water Resources did clarify that the Kern Bank does help supplement state water deliveries to many public entities during periods of drought.
19:47Meanwhile, environmentalists say focusing only on the Resnicks misses a much bigger point about the state's water management.
19:56As the state water project shows, if they promise water that doesn't exist and have us try to pay for it, the environment's getting trashed and the wrong kind of crops are being grown and there's no water for it.
20:11The Department of Water Resources told us its water project was designed with the best data available in the 50s and 60s.
20:20It also said that even though deliveries will likely keep shrinking, the state is working on new infrastructure to keep water flowing as droughts get worse.
20:30Still, in the rat race for more water, small farmers are suffering.
20:37Rebecca Kasser has watched her family's land dry out.
20:41She helps run Avalor Moor Farms in the Central Valley.
20:46Just nine years ago, her land was filled with pistachio and almond trees.
20:51We were 100% planted out, meaning that all of our acreage had something growing on it.
20:57But her district has younger water rights, so when there's a drought, growers here are among the first to see cuts.
21:06Farmers used to be able to pump enough groundwater to keep their trees producing during droughts.
21:12But in 2014, California passed a law called the Sustainable Groundwater Management Act, or SIGMA,
21:20which barred growers from pumping more groundwater than natural sources like rainfall could replenish.
21:27In some districts, each piece of land was assigned a set number of water credits.
21:33But that often wasn't enough for thirsty crops.
21:37So to keep their trees producing, farmers left some fields unplanted, a process called fallowing.
21:45We fallowed out over 60% of our farm so that we'd be able to have the water in order to irrigate our plantings.
21:56To save their pistachios, some farmers were forced to buy more land just to collect extra water credits,
22:04and left the new fields unplanted.
22:07So we started picking up more fallow acreage, 20 acres here, 20 acres there.
22:14Ultimately, SIGMA could take about 900,000 acres out of production in California's main crop-growing region by 2040.
22:23That's roughly 20% of the irrigated farmland in the San Joaquin Valley.
22:29Reports project that much of the remaining cropland could go to nut plantations, like pistachios,
22:36with acreage expected to grow by about 40% between 2023 and 2031.
22:42The folks that have the water are using it on their high-value tree crops to the detriment of other things.
22:48California doesn't just produce, you know, the majority of the nut crop.
22:54California produces the majority of the fresh fruits and vegetables in the country.
22:58And if the ability to do that gets impacted, you're going to start to see price shocks.
23:04As for which crops take the biggest hit?
23:07It is very much a function of whether any of the farmers have more or less access to whatever surface water is available.
23:15And Wonderful has that advantage because of the bank.
23:20The best thing about the water bank is it doesn't use groundwater.
23:24It uses stored surface water.
23:27It's a tool that you can use to manage through droughts.
23:30Wonderful has shifted some pomegranate and almond acreage, too,
23:36helping to double plantings of its top crop over the past decade.
23:40And part of that is because of how we view the market and our leadership position in the pistachio industry
23:47and what kind of competitive advantage we have.
23:50We could brand every one of our wonderfully delicious pistachios with the word Wonderful on them.
23:56Or we could just write it once.
23:59My mission is to get the world to eat more pistachios.
24:02Diana Salsa helps run marketing for Wonderful.
24:06The team led the company's 2009 Get Crackin' campaign featuring new packaging.
24:13More people were aware that pistachios now came in this iconic black bag.
24:18Before that, pistachios were really sold in bulk.
24:22Within just a few months of the launch, Wonderful's sales surged more than 220%.
24:29Mmm. Is that honey?
24:34We invest millions of dollars consistently to make the whole world aware of pistachios.
24:40By 2016, the U.S. was dominating the global supply, outpacing Iran,
24:46and has remained the top producer ever since.
24:49The Resnicks have invested over a billion dollars to be able to handle the demand
24:54as our supply and trees continue to grow.
24:57In America alone, Wonderful Pistachios was retailing one billion dollars worth of nuts annually by 2020.
25:05Three years later, the Dubai chocolate trend boosted demand fast.
25:12And has already driven pistachio kernel prices up nearly 35% between 2024 and 2025.
25:23And this year, California growers are expecting their biggest harvest ever.
25:29Experts now project the pistachio market will grow from about 5.6 billion dollars in 2025 to over 7 billion by 2030.
25:41The U.S. supplies more than 60% of the world's pistachios.
25:45And until this year, China was largely the top buyer.
25:50But they've imposed tariffs on American nuts, making them more expensive.
25:55As a result, imports dropped by over 50% in the last year.
26:00That's opening a door for Iran to take some of the Chinese market from the U.S.
26:08The country has remained a big player, supplying about 16% of the world's pistachios.
26:14Mostly to China, Turkey, India, and the UAE.
26:19Only a tiny share of Iran's pistachios ever make it to the U.S.
26:24Each year, New York City restaurateur Nassim Alikani brings back a single bag for herself from her trips home to Iran.
26:35I was in Iran in February, and I just brought this with me.
26:39They're meatier, lighter.
26:42Clearly see a difference between these and what we have here in this country.
26:47She runs Sofre, a Persian restaurant that highlights ingredients from her homeland.
26:53Pistachios hold a quite special place in my heart, as well as Iranians.
26:58She made us a few sample items from her menu.
27:01From very early on, I realized pistachios are a real treasure, and they should be acknowledged as such.
27:08See this? This is nice.
27:10We use them in this very elegant shape.
27:13Look how tiny they have been sliced.
27:16She reserves that single bag of Iranian pistachios for one cookie on the menu.
27:26They are so delicate that we use them as garnishes for really special dishes.
27:33But sanctions have made Iranian pistachios hard to find in America, and much more expensive.
27:40So she rarely cooks with them.
27:43It would be exuberant in terms of the cost.
27:46She says prices have soared in Iran, too, as tensions escalated with Israel this year, disrupting supply chains.
27:54Extreme weather has also made it hard to keep the conditions just right for pistachios.
28:01So they've become even more precious and expensive.
28:06Right now, many people can't afford it.
28:09By just being eliminated from our sphere of our eating habit, then it becomes part of the culture being eliminated in the long run.
28:20Preserving those authentic Persian flavors matters deeply to Nassim, and it's what keeps her regulars coming back.
28:30When I think of Persian food, I think about pistachios.
28:34There's a really special connection that I want to pass on to my daughter, and coming here is such a wonderful way to share a part of my culture with her.
28:42I think we didn't have access to Persian ingredients.
28:45We lose out on the things that make food rich.
28:47The things that make food zesty.
28:50I live for pistachios.
28:53I'm Syrian.
28:54I was born in Syria, and they're very big on pistachios.
28:57It's a very nostalgic image.
29:02The restaurant's most popular dessert, saffron ice cream, is made with California pistachios.
29:08But Nassim still uses them sparingly, acutely aware of the true cost of this nut.
29:15It's been a pattern in this country that we get somebody else's seeds, and we grow it, and we make it bigger.
29:23I'm sure that somebody's suffering.
29:26Maybe a small farmer is suffering.
29:27Maybe land is suffering.
29:29Something is not right, because these pistachios are kind of inexpensive for what they should be.
29:36Back in California, Kenan Farms is still trying to keep some of the oldest groves productive.
29:51This is one of the original plantings in California, and she's still producing.
29:55It's kind of neat.
29:56It's kind of like you're in a museum, you know?
30:00You're part of something that started many, many years ago.
30:06The Kenans say they would have never predicted back then how hard it would eventually be to keep these trees producing.
30:14Consistency of supply, that's where California has thrived.
30:18It has grown its production to meet the needs of all countries around the world, and that creates the demand even against competitors such as Iran.
30:31But that demand means farmers need to keep up, no matter how challenging that may be.
30:38So as a smaller farm, we've had to be really innovative and resilient with regards to the water issues that we're dealing with.
30:47We want to do right by the soil, and we want to take care of the resources.
30:53We've been in this game for a while, and it's our passion and our legacy.
30:58In order to stay relevant, we're just going to have to continue to be creative.
31:17We're just going to have to go for that work!
31:21We'll talk about a moment again!
31:23We'll see you gonna stay relevant now.
31:24We'll see you behind it!
31:26I'll see you next day!
31:29That's true, period!
31:34I guess you should find a way to have to continue!
31:36After you have got kids, please actually!
31:38abanar, раз, start?
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