By Judy Hirigoyen
With every new acre of pistachios California reaps a wellspring of economic rewards totaling more than $6.4 billion in the Golden State. A new economic study commissioned by American Pistachio Growers (APG), and released today on the opening day of APG’s 2023 Industry Annual Conference, has quantified the benefits in terms of industry spending for goods and services, jobs created, labor income and contributions from indirect business taxes. The study by Dennis H. Tootelian of the Tootelian Company of Sacramento underscores the growing importance of pistachios to the state’s economy. Data were also analyzed for Arizona and New Mexico.
Tootelian’s number-crunching reveals that the economic impact of California pistachio grower and processor spending on farming operations totaled nearly $3.5 billion annually, or the equivalent of more than $9.5 million per day in 2022. Total economic output, the best measure of economic activity, was calculated by Tootelian at more than $6.4 billion, an average of more than $17.6 million every day, impacting an array of sectors from real estate, professional services, construction, insurance and retailing.
Spending by California’s pistachio industry helped create 55,100 jobs on a full-time equivalent basis in 2022. Grower spending generated more than 27,000 jobs and processor spending generated more than 28,000 jobs.
The new study pegged labor income generated by California growers and processors at nearly $3 billion in 2022. Tootelian said the labor income helped boost other sectors of the economy. Possible purchases with this labor income would equate to $770 million for housing, $373 million for transportation, $282 million for food, or $185 million for healthcare, and even $82 million in charitable cash donations, according to Tootelian’s analysis.
“The money spent by growers and processors spreads throughout the economy, creating business activity down the main streets of towns and cities across the state,” Tootelian said. “The green kernels shaken from California pistachio trees each year produce another kind of green for our economy —- thousands of jobs and millions of dollars in business taxes.”
The data calculated the total indirect business taxes generated as a result of grower and processor spending at more than $230.9 million in 2022, or the equivalent of $632,600 per day. The impact of the industry’s spending generated $98.8 million in sales taxes and $81.3 million in property taxes in 2022, according to the data.
A key driver of this economic boom created by California’s pistachio industry is the surge in bearing acreage from 371,386 acres in 2020 to 446,000 in 2022. “Just the increase in bearing acres of 74,614 acres created additional grower and processor spending of more than $513.8 million on these bearing acres, averaging more than $2.7 million per day,” he said.
“With every economic study of the industry, the numbers keep getting more and more impressive,” said Tootelian. “Every new pistachio seedling planted in our state’s soil turns the key of a powerful economic engine that benefits all Californians, no matter where they live.”
California produces the lion’s share of the nation’s pistachios —- about 99 percent —- but two southwestern states, Arizona and New Mexico, are making their mark as valuable contributors to the U.S. pistachio industry.
The data for Arizona’s pistachio growers and processors show total expenditures of $92.6 million in 2022, total economic impact of $171.1 million, the creation of more than 1,570 jobs and $70 million in labor income, and more than $5.3 million in indirect business taxes. “Depending on how these funds are used, they can help benefit state and local programs,” Tootelian stated.
For New Mexico, expenditures by growers and processors totaled nearly $3.2 million in 2022, total economic impact was $5.9 million, the industry created 55 jobs and generated nearly $2.5 million in labor income, and the state’s growers and processors created nearly $188,900 in indirect business taxes.
The 2022 study by Dennis Tootelian, Ph.D., Emeritus Professor of Marketing at CSU-Sacramento, is a follow-up to economic studies conducted for APG in 2017 and 2021. His analyses were conducted for net total expenditures by growers and the net variable expenses of processors. He completed economic impact studies using 2022 data for California, Arizona and New Mexico.
American Pistachio Growers is the non-profit trade association representing more than 865 growers and member processors in California, Arizona, and New Mexico. The 2022 economic impact data for the three states and an infographic with highlights of the Tootelian study for California, Arizona and New Mexico are available at www.americanpistachios.org.