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The food we eatCalifornia pistachio growers worry about big losses from FDA recall

Published 7 April 2009

California produces 96 percent of the U.S. pistachios; the entire $540 million-a-year industry is under threat as a result of FDA’s pistachios recall last week

California’s pistachio growers are bracing for what could be a serious and long-lasting drop in sales as federal officials continue to advise consumers to avoid eating the nuts amid a salmonella scare. Pistachios from only one processor — Setton Pistachio in Terra Bella — were found to have salmonella, but California’s entire $540 million pistachio industry could face the consequences.

Iif past experience is any indication, consumers might be slow to return. Last summer, for example, a salmonella outbreak made 1,400 people sick in 43 states, and initially tomatoes got the blame. Later the outbreak was traced to jalapeños and serrano peppers, but the tomato industry still hasn’t fully recovered. Indeed, an outbreak of food-borne illness is one of the agriculture industry’s worst nightmares. The health risks are high — and the costs can reach into the millions of dollars.

The Food and Drug Administration (FDA) recommended last week that consumers stop eating pistachios after the agency launched an investigation into salmonella-tainted nuts from Setton (see 3 April 2009 HS Daily Wire). The recommendation was precautionary as the agency sought to sort out exactly which products might be affected.

Fresno Bee’s Robert Rodriguez writes that California produces 96 percent of the U.S. pistachio supply, with most coming from Kern, Madera, Tulare, Fresno and Kings counties. At least two Valley pistachio processors have posted messages on their Web sites alerting customers that they are not part of the pistachio recall: Paramount Farms in Lost Hills — the nation’s largest grower with 30,000 acres — and Keenan Farms in Avenal.

Grocery store chains including Kroger, Publix, and Save Mart voluntarily recalled thousands of pistachio products after the FDA’s recommendation. Setton Farms voluntarily recalled 2 million pounds of its products while its parent company, New York-based Setton International, recalled 118,000 pounds. Yet it is not known whether the salmonella found in the nuts is linked to an outbreak.

Regaining consumer confidence can be difficult after something like this, University of California food marketing specialist Christine Bruhn said. “If the FDA says there is a problem with pistachios and salmonella, as a consumer you may not want to take that risk,” Bruhn said. “There are other opportunities to substitute products, and people may do that.”

That is what happened with tomatoes. A recent study by the Rutgers Food Policy Institute found that 23 percent of those surveyed did not resume buying tomatoes after last summer’s salmonella outbreak — even after the FDA said it was safe to do so. Ed Beckman, president of the Fresno-based California Tomato Farmers, estimates tomato growers lost $100 million in sales. “And I am not sure we have fully recovered,” he said. “Our sales are still down. … It is very difficult and expensive for any growers’ organization to fight back again.”

Produce industry analyst Jim Prevor is not optimistic. “As a practical matter, most reputable retailers will not sell those products that the FDA recommends consumers not eat,” said Prevor, author of a blog, the Perishable Pundit. “It pretty much closes down the industry. And how many companies have the capital to stay in business if they are not selling any product?”