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Jan 29, 2020
Ali Amin is the founder and CEO of Primex, a fourth generation grower, processor and international trader/exporter of nuts and dried fruits. Ali has served as chairman of the California Pistachio Commission and through Primex, he owns over 5,000 acres of Pistachio orchards. Ali explains why Pistachios are a climate change crop of choice
“You plant Almonds for yourself. You plant Pistachios for your grandkids.”
This week in Agriculture Adapts:
– Why Pistachios are a near-mystical crop with unparalleled resilience
– What is “Chill” and why is it threatening tree nut and stone fruit production in California (and in some cases the entire U.S.)
– How California is thinking about its ground-water crisis
Borna (ClimateAi) 0:04
This is Agriculture Adapts by ClimateAi. Every week we speak with industry leading executives, farmers and academics to get a 360 view of how the agriculture sector is innovating to stay ahead of a changing climate. I’m your host Borna Poursheikhani.
Himanshu (ClimateAi) 0:18
And I am your co host Himanshu Gupta.
Borna (ClimateAi) 0:20
We’re a team of climate scientists and agriculture entrepreneurs trying to make farming more resilient, profitable and equitable as we transition to a new age of agriculture. This podcast is our journey as we explore the hurdles and opportunities that lie ahead for the industry that feeds the world.
Hello, and welcome to another exciting episode of agriculture adapt with us here today we have Ali Amin, the founder and owner of prime x, a grower processor and international trader exporter of nuts and dried fruits but I think you guys have the majority of your volumes coming out of pistachios, is that correct?
Ali Amin 0:52
Well, actually almonds is the bigger trading volume for us. But in pistachios, we are vertically integrated And of course, a lot more intimately involved. And, you know, more accepted worldwide in terms of the trading part of it as the people in the know when it comes to pistachios. Gotcha, gotcha.
Borna (ClimateAi) 1:15
Awesome. Well, you thank you so much for joining us here today. We’re very excited to dive into this conversation. We’ve been looking into pistachios for a while now. So thanks for joining us. Sure. We usually start these episodes by sort of getting to know a little bit more about you and your background and how you came to starting this company and then a little bit more about primax as well as a whole.
Ali Amin 1:33
I’m fourth generation pistachio growers and many German nations are farmers basically from southern part of Iran. So my forefathers were the first to started switching from other role crops such as grains and, and cotton as a as a trading commodity basically, to pistachios about four generations ago. So the extended family Pretty much have had potential farming in Iran. I came here to go to school and stayed there after. My uncle had been here for a long time and was an importer and distributor of dried fruits and nuts is two main items pistachios from Iran and cashews from India. When pistachio in California started taking hold, he realized that he needs to be involved in that so I started the first a roasting packing facility here in California for him in Los Angeles. And later on with a processing plant in Kern County, lost hills. So I was working for him from 1982 to 1987. I left to actually start exporting and in 1989, I established the prime mix international Mainly because my uncle and his operations were mostly in the domestic market at the time, he was the number one brand domestically. So I ended up basically focusing on exports and representing him as well. And eventually, I was 40% of his sales. In 2001. He sold his company to the biggest handler, which is at the time was paramount farms and now it’s called Wonderful. And in 2001, and in 2002, is when I decided to actually set up a processing plant to process our own pistachios and extended family and, and some of the growers I’ve known for a long
Borna (ClimateAi) 3:46
time. Awesome. And for those of you that don’t know, I’m also Iranian American and pistachios are a huge part of our culture. So it is practically a celebrity in the Iranian American World over here, California. So The majority of your pistachio operations and you mentioned being vertically integrated are the majority of your operations and the farms that you source from coming out of California.
Ali Amin 4:08
Yeah, there are in California is pretty much 99% of what you would consider us grown pistachios are from California. The other 1% or so, is from Arizona, the bulk of it. New Mexico also has some and I think Nevada also has some
Borna (ClimateAi) 4:30
gotcha and just before we dive into some of these more nitty gritty questions on on climate and pistachios here, was curious to hear more from you on the general structure of the pistachio world for people who don’t know about pistachios and sort of describing what a typical year it looks like for a pistachio processor.
Ali Amin 4:47
Well, the statute I think, maybe among the nuts, the uniqueness of them are number one that they are the only not that naturally open on the tree. Many consumers don’t know that they sometimes ask the question, how do you open them? So, you know, anywhere from 80 to 90%, depending on the year are naturally opened on the tree, the balance are closed, which would be for shelling and producing kernels. They are also moist, they are much more fresh when you harvest them. They’re like your fruit with over 35 38% moisture. And the hall, which is green, you know, decomposes fairly quickly once harvested, and has a die. So we will actually stain the nuts eventually, if they’re not processed clearly, in a reasonable time, let’s say so basically, as processors, once harvested and the trailers come to the plant, we aim to process them as fast as we can. We actually record and Measure every season, you know, what was the average time between the arrival of the trailer and hauling process basically going over the the hauling pit basically. And, you know, good years we are about six hours and on property or sometimes during the peak periods, it becomes challenging and it may go over eight or 10 hours, but anything over 1214 hours depending on the temperature and conditions, but at the time of harvest and while the trailers are sitting in the yard, would then start the process of changing the white shell color into a little bit less white and eventually, you know, light stained dark stain and those kind of things. Because of this, this actual processing is a lot more expensive, because it’s a wet process for hauling. And the pistachio though, right so you need to have all that equipment. The hauling and drying and the silos that the season starts from usually towards the end of August, maybe August 25. Seventh, and it carries up to maybe October 20. So maybe the last week of August through the third week of October. However, it starts very slow, you know, few growers start harvesting, and it ends very slowly, but you may have a peak of 12 or 14 days, and that peak determines your capacity. And another unique thing about pistachios is that they’re alternate berry because the bugs on the pistachio trees on a two year cycle and so if the crop if the tree produces a big crop, it will lose some of that but for the next year that are already on the tree and therefore the next year will be an Oscar up here. And because of that basically if you look at all that equipment which is all stainless steel, a lot more expensive than the equipment for In, let’s say almonds, and hauling almonds starts because it’s it’s dried on the ground and it’s a dry product to be hauled. It starts from August, and it can go on up to February. So you’re using an equipment which is not all stainless steel, it’s mild steel for all that period. But for pistachios, the peak which determines their capacity being 14 days, every other year is the use with all that stainless steel hauling and drying and silos and everything and you have to dry it also. So pistachios are basically one enter the weight of the hall, one enter the weight of the water, and one third is the weight of the dried nuts.
Himanshu (ClimateAi) 8:49
Only I want to go back to the introduction that you made and you talked about how your forefathers switch to pistachios from row crops. And a lot of our listeners are growers. around the world and funds who want to invest in various crops as well as specialty crops. So in your experience, in your view, how easy or difficult it is now for a grower to switch to pistachio or a high value crop from a row crop?
Ali Amin 9:16
Well, that’s which, of course has been happening here too. And I sometimes joke and when I say that, you know, my forefathers, great grandfather start switching from cotton to pistachios with it, I said, Thank God, because I don’t think that family would have done as well, if they had stayed in producing cotton. And then of course, in the southern part of Iran, where water is an extremely limited resource. pistachios are the hardest tree not in a way, requiring the least amount of water and being able to survive with lack of it. They may not produce much but they won’t die. So here in California also, if my numbers are correct Maybe approximate, maybe 2030 years ago, we had a million acres of cotton and now maybe we’re down below 200 or 300,000 acres. So that conversion has been happening as a matter of fact probably the most conversion basically from any other row crop has been from cotton to pistachios, more recent, I think there is are finding it more challenging. So we see by the more dairy land being sold, and the buyers are planting pistachios, or the dairy people themselves are switching some of their ground to to pistachio then Ciao challenge, of course, is that you know, in almonds, let’s say it takes two years before you break even from the time you plant almonds. In pistachios, probably it’s gonna be eight years. So the challenge for somebody who’s in a row crop is the initial investment and growing the street for a deal. Before you break even, so that’s the startup challenge. But once you get going with the first orchard and the production, then it pays for your further developments. And, again, the other benefit of it, you know, there’s always two sides to everything. So I’m going to start maturing and breaking even and making money, you know, after the third year, but you know, when they get to 20 Max 25 depending on the soil and water, you have to replant them. That’s their useful life, let’s say from three to Max 25. With the SAS shows we have for the year threes, yes, with the statues we have producing 50 year old threes. We don’t know how far I think in in Middle East. There are commercial producing orchards of over 140 years old, but they’re their hands. Harvesting here the question would be, you know, with the trunks get too big, so we cannot shake them anymore. And that would be probably the determinant factor for pistachios.
Himanshu (ClimateAi) 12:11
Are you saying that I can buy a pistachio orchard now? And my grand grandkids will thank me for that.
Ali Amin 12:17
Oh, yeah, absolutely. Like, like, I’m thinking like my grandfather. Actually, you know, there’s another thing they say that you know, you plant almost for yourself, but you plant pistachios for your kids and grandkids.
Borna (ClimateAi) 12:29
So when you’re thinking about something that’s so long term, like 50 to 150 years, there’s a lot of things that need to be factored into those decisions. If you want to buy a pistachio orchard, then what are the top climate or weather things that you’re looking for when you want to invest long term in a pistachio orchard? Because right now, what we’re seeing in California is a lot of issues with things like chill, which we can talk about later on and dive a little bit deeper, as well as water scarcity like the big drought that we saw a few years back. So how do you how do people start thinking about these long term risks in terms of weather and climate And when they’re purchasing new operations or new land for pistachios,
Ali Amin 13:04
when you’re thinking about permanent crops, and pistachio being, you know, in that term the most permanent you know, lasting over 50 years or more hundred, who knows, is certainly then the components of water availability and quality and the soil quality become a bigger factor. Which means that, you know, if you pay $5,000 more for the land because of class one soil versus class two or class three or so on, then imagine that you are actually amortizing it over 2030 4050 years versus over 20 or versus over 10. So, it behooves you to actually pay a higher price up front and enjoy the benefit of it for long for a long time. Basically If you have the investment to make, having said that pistachios, because they’re a hardier desert tree, you said you’re playing American. I don’t know if you’ve traveled into the southern part of Iran, like Grafton, john Sherman, and yeah, as you know, if you drive in between the villages and cities or through some of the mountains, you will see indigenous, native pistachio trees. And you’ll be amazed sometimes you’ve seen in sort of like a rock formation, a pistachio tree that’s 200 years old, how it gets its water and how it survives is almost like mystical. So they are very hardy. And so they they can take more salt than other tree nuts. And therefore they can grow and still produce decently well in alkali land and with salty water. You know, whereas, let’s say with almonds or walnuts, it’s pretty To have surface water where it’s not alkali or salty and so on. So you know why that is the case. Still pistachios will do better or have better yields with better soil and better water Of course.
Borna (ClimateAi) 15:16
Gotcha. So does that mean that pistachios were more resilient to the drought than the other tree nuts because a lot of from the stories that we’re reading and the people that we’re talking to we’re hearing that you know, the deeper the aquifers go meaning the more that people are pumping groundwater for, you know, fueling their operations for watering their trees, the more salty the water gets. So with that in mind wore the pistachio or doesn’t the pistachio yield as a result more resilient than say almonds or walnuts in California, pistachios
Ali Amin 15:44
get impacted the yield does get impacted as the as you have a lower quality of either soil or water. However, they’re less impacted. drought resistant, yes. Meaning they can survive are perhaps on one acre for the water. Whereas almonds may die on that low off, you know why they’re basically pistachios need the least amount of water compared to the other three nuts. And they can survive on again on the least amount of water Also, sometimes, you know, we find the watchers in four years that on irrigation basically they have survived. So people had abandoned them and 20 years later the trees are there, and somebody starts taking German in two years or four years time they’re going to full production again. So the
Borna (ClimateAi) 16:33
pistachio orchards are affected but much less so than the others. Okay, that’s interesting. And what about chill if we so when we’re talking again, going back to this idea of a long term purchase of a pistachio land, how Top of Mind should chill be because if we’re looking at like the chill maps, and I’ll take a pause here to sort of just describe chill chill is basically a winter rest period induced by like being within a certain temperature. Ben, is that a fair description? It’s an oversimplification of course. But
Ali Amin 17:00
I think there is a technical term for the trees the kind of trees that do need chill winter chill or basically which results in what they call dormancy. And yes it is a temperature supposedly below 45 degrees within let’s say the range of 10 to 45 degrees. Of course it gets more complicated because it also depends on you know, sun and and fog so on on winters where you have more fog, that means while the temperature is 40 or 45, or 50, if you have son or you don’t have a son, the temperature on the bud is quite different. So foggy winters actually add to the dormancy, less foggy winters with the same temperature would have less dormancy factors. And I think in the models we have, we have chill hours and now they have moved on. Different model there is Utah model and so on. Which nowadays the more common thing that’s talked about besides chill hours is two portions. So having said all of that stuff the you know, for me that is so vested in pistachios are being vertically integrated. So, let’s say a much higher percentage of my net worth is tied to pistachios. You know, in so many ways California is the perfect climate for pistachios than it is in Iran or perhaps in China and maybe a few other places. And because of the financial requirements for the winter chill for a dry summer for not getting a cold, early spring weather and having a frost. We’re California for pistachios rarely has or almost never has had a frost so if you’ve had it’s been minimal damage. You know, less than In 5% or so, all of the benefits are here compared to other places, and we’re probably having the highest yield here in California. But my number one concern I have no problem. You know, we’ve gone from one and a half million pound production in 1975 to a billion pounds in 2018. And in the next 1012 years, we will probably reach 2 billion pounds. And I have no concerns about marketing 2 billion pounds, I know that the markets will grow, especially export markets to match the increased supply. My major concern is actually what you mentioned, its lack of chill or dormancy, whether you believe in climate change or not, you know, when I started in this industry back in 1982, and used to travel to Madeira and I operated a small processing facility Therefore, for a year and a half, and I used to go back and forth, sometimes over the weekends to LA, and my biggest challenge during the week, winter was this thick fog, that you could only drive in 20 miles or so. And nowadays, I rarely see those faults when I travel to the to the sandbox in value. And so with climate or temperatures changing or rising, it’s not just that the higher temperatures go higher, it also means that the lower temperatures will go higher. So means that probably if we had every 20 years and lo chillier. Now we may have every 10 years or maybe every five years so that frequency may increase. And that’s my biggest concern about the future of pistachios in 2015. Just to give you a reference point where was a low chill factor, probably below, somewhere around 400 to 500 hours depending on which part of the valley you were in. The yields were impacted anywhere from minimum, let’s say 30%. To as much as hundred percent there were places with microclimates that there were 100% blank, and were not harvested. in aggregate, the whole industries production was close to one third of what it should have been. So the lack of chill for pistachios is extremely great statues perhaps need 800 hours to have a good crop, let’s say versus almonds that could function well with 400 hours.
Borna (ClimateAi) 21:48
So can you describe a little bit more what is going on in the pistachio trees and why cellos important and just for the listeners here. Basically, there’s a chill threshold that each different variety of tree is expected to need to get in the sun. is still developing on this sort of thing, but basically is warming winters are very detrimental.
Ali Amin 22:05
I’m not sure if I can speak to their physiology of the tree and the reason why pistachios need more chill compared to other trees. I just know the fact that they do. And like you mentioned, the science is developing. We also know in terms of mitigation, you know, we use oil to mitigate the impact of yours with listening marginal chill. And, you know, there is at least evidence that yes, on marginal chill years, it seems to help. However, also, on years where we’ve had real low chill, it seems like the oil is not gonna be able to take care of it, it may be able to take care of 50 hours, lack of 50 hours, lack of hundred hours, you know, there is a final point that they will not be able to help anymore.
Borna (ClimateAi) 22:57
Yeah, and so are a lot of You know, large pistachio owners or people who were involved in the pistachio industry, considering moving because when we were tipped off to sort of this concept of chill, being a climate forecasting company, we really dove deep and spoke with a lot of academics, researchers and people in industry, including yourself. And we found a few things a the physiology of what’s going on in the winter time with these, you know, increasing temperature winters is not exactly understood, we don’t really know what’s going on in the trees. That’s one part. The other part is, like you said, We don’t really know which tools are best, or how well those tools will work to mitigate for these low chill years. And the last thing is even the parameters are not really well understood. So like, I was talking to Bob Klein, who’s the head of the pistachio Research Board, and he was saying that Yeah, we used to think it was winters but you know, this past year we had, the winter was extremely warm and in the spring for whatever reason was cold and the yield and end up being fine. So there’s all these these different variables that are misunderstood and it seems like one of the only options for someone who wants to continue being involved in the pistachio world would presumably be to move north because a lot of these places like five points in California are just getting hosed year over year on low chill years. So is that a big, top of mine issue for a lot of people who want to stay involved in pistachios?
Ali Amin 24:15
I’m not sure how well you know your average grower or maybe even investor is tuned into the challenge of chill or the potential of lower chill as a result of climate change. And maybe there is a small component in there that shows itself economically in terms of the value of the orchards that are being traded. But perhaps within the folks in the know maybe that would be a consideration to again move to places whether it’s up north or microclimates where or lower areas of the valley that tend to have more fog, you know, as a consideration Among other factors, but then you have also other mitigating factors when you move north, you know, when you move less in order to delta, when you have more water, then you also have the reason you have more water is because you have more rain, and then more rain during the spring also impacts the yield. And therefore, when you look at the statistics, you know, they’re the yields up north, north of the Sacramento, delta basically are lower than the yields in the south.
Borna (ClimateAi) 25:33
Got it. And just to go back to the conversation that we were having before about, you know, the salty waters, which come from, again, depleting the aquifers. My understanding is that there are some bills that are going to be passed, namely the sustainable groundwater management act, that will limit the amount of groundwater we’ll be able to pump so it seems like the salty waters will be less of an issue but then a new problem of Okay, well, how are we going to get water to all these trees? If we do get hit With another drought year, and I know water in California is a very messy issue, but what’s the forecast for, you know, water regulations looking like in California?
Ali Amin 26:10
Well, actually, to maybe correct. Something you mentioned, which is sigma, the the sustainable groundwater act is already passed 20 Well, 2020 is where all the various basins are supposed to submit their plans got for becoming in balance basically. And then I think I’m not mistaken 2014 or something is when if you if the industries or cannot on their own manage the the groundwater and make it sustainable, then perhaps then the state gets involved and then mandates things and they will make decisions for you. And basically all the various water districts have been working on it. And then the most common solution is, since it seems like because of environmental concerns and and environmentalists in a way developing new dams about ground storage more challenging. So there are more and more districts that look to underground storage, which is banking water or drinking water as a solution. So on the wet years, the plan is to be able to take floodwaters or excess water and sink them in their district. So that they would have them available on a, you know, a drought the years and in the longer term to be in balance. That’s where many of the districts are working on. But in aggregate, you know, the whole of California, their statistical numbers I’m not, I’m not going to quote them because I’m not sure how like there’s my numbers or how many millions of acre feet we have. Short, yet I have in this area, you know, climate is a much harder issue to for us to control as the state of California. But water, it seems like even under drought conditions we may have maybe on an aggregate less water. But I think you know, maybe costly. But you know, there are different plans that you could still divert water during the extreme wet period where millions of acres go straight down to the ocean. And, again, it requires, you know, the canals and the plumbing in a way to be able to sink it throughout the valley and support the groundwater in the sense of making it sustainable in that way. So I believe the solutions are there, whether they’re 50,000,000,060 billion or more You know, I don’t know whether we know the exact numbers, but we do have let’s say enough users and enough add value to pay for these kind of infrastructure with bonds or whatever and pay for it in 20 years 30 years or so. So, I believe the value is there on the short term, I would say again among in terms of you know, drought years and in terms of the solutions, I am less concerned for permanent crops and for high value specialty crops like pistachios indoor those years, the statues can afford to buy water and then perhaps some of the row crop would have to stop or there would be better off selling their water, then planting their their crops.
Himanshu (ClimateAi) 29:52
You have been very generous with your time so far and and i’m sure like a lot of our listeners would have learned a lot from you. You as a as a consumer I’m curious and this might come across as a very stupid question but you know I also grew up in India and we our diets are very dry foods heavy, both in raw form as well as value added products. So now after coming to the US in California I do see alternate products such as almond milk or more valuable products from almonds. Why is that the case we don’t see such more you know, such value added products such as pistachio milk in the market on the shelf is because of the chemistry is because the marketing you know, pistachio didn’t receive the same level of marketing as on mustard.
Ali Amin 30:40
Actually, I think within the California pistachio industry. You know, we have sort of two camps, wonderful which is the biggest handler, maybe close to 55 60% depending on the on or off crop your so does their own branded marketing and programming. The wonderful brand. But then we have also the other handlers processors, which belong to voluntary association called the American pistachio growers. And they promote pistachios, generically. And as a matter of fact, and you mentioned you’re from India, this year in September, we picked up India’s another market. And the reason I say we picked up is because when we go as American pistachio growers and I’m on the board, when we go into a market, we go there forever. So we picked up China many years ago, Europe, you know, let’s say we’re besides domestic Of course, we are in Germany, Italy, Spain, UK, France, China, and now we’ve picked up India we do some in Korea and maybe a few other places but and now the reason for in general whether it’s omens, one of pistachio Obviously, there has been a tremendous shift in consumer perception towards nuts since I would say 40 years ago, 40 years ago, if you went to the doctor and you had a heart condition, high blood pressure, cholesterol, etc, the doctor would give you a list of things to avoid, and nuts would be on the on that list. And the reason was that nuts have oil and they’re fattening and so on. So there was no recognition between good and bad fat. So ever since all these commodities and the research they’ve done and the promotion they’ve done, the consumers have been educated. And the fact that outside of the nuts I think there has been a trend moving away from animal protein to plant food. So everybody now agrees, consumers that plant food is better for you. If you can avoid the the taste factor of you know the Use of being used to meat and stuff. Now among the plant foods. Now also, the recognition among some of the consumers is that nuts are super fruit, not only their plant protein, but also you know, we started promoting minerals they have calcium and magnesium and so on. And later on, we moved on also discovering the phytochemicals and the benefits of phytochemicals. Lastly to your question as to why then we have almond milks but not pistachio milk. That is because we are selling all the pistachios we have and all the pistachio kernels we have and in before we get to a point where we would need to go there and so on that meaning we would probably have to be 2 billion pounds. So currently, I think the short answer is we don’t have enough supply. We don’t have enough production to support All that kind of activity.
Borna (ClimateAi) 34:03
Well if you guys start producing pistachio milk, I promise you I will shift from from oat milk to pistachio milk in my oatmeal every morning.
Ali Amin 34:09
I can tell you though, that there are some interesting developments. Like for example, I was in Europe, and I ordered a pistachio sambala I tell you, that was the most pasty dessert I’ve ever had.
Borna (ClimateAi) 34:25
That’s awesome. Okay, I think that’s a that’s a good place to stop here is prime Mex a brand people can look for in stores or how can they go about supporting you guys.
Ali Amin 34:34
primax is an exporter of ball product. So we shipped to all the major roaster and distributors which have their own brands. I’m not sure as far as consumers how they can help us of course as as growers. We would love to have them as one of our growers. We would love to continue to be part of The pistachio industry and continue to be part of the solution and choice for the growers as we as the this commodity and this industry continues to grow.
Borna (ClimateAi) 35:12
So growers reach out to alley consumers keep eating pistachios and talk to your local Congress people about promoting pistachio milk.
Ali Amin 35:21
Yes, and another thing I would also say that I would definitely recommend growers, whether they deliver to any of the member processors of American pistachio growers to certainly become a member of American pistachio growers. Since I’m involved on the board as well as as a processor and as a grower. I see a lot of value in the investment we make. In terms of the assessment we pay to American pistachio growers. I see that you know, that investment returns three folds if not more in terms of supporting prices or increased demand. Globally, so say, bring your product to us, as well as even if you’re not support them a statue grower. Gotcha. Well,
Borna (ClimateAi) 36:09
this has been an extremely interesting and insightful conversation. I thank you so much for joining us on this episode.
Ali Amin 36:13
Absolutely, anytime. Thank you,
Borna (ClimateAi) 36:18
everybody. Thanks for listening if you have any feedback, or you’d like to add your own two cents on the topic discussed today, or if you’ve just got your own ideas about someone that we should discuss in the future, please feel free to shoot me an email at email@example.com. At its core, this podcast is just a way for us to learn and we want to share our learnings as we go. So we’re always open to building on these conversations and hearing new perspectives. Thanks for your support and see you next time.