These nuts are one of the surprising products getting hit by the Iran war. Iran is the world's second largest producer of pistachios. But the war is causing a shortage by disrupting trade routes and choking shipments. It's sending pistachio prices to their highest level in nearly 8 years. That could mean more business for US farmers. California is already the world's top pistachio producer, but growers there have been battling extreme drought and tighter water restrictions. Now, experts say that pistachios could get so expensive, trendy recipes like Dubai chocolate may have to change or disappear altogether. And it's already hard for Iranian restaurants in the US to get pistachios from their homeland because of sanctions.

Right now, people don't even use pistachio for their typical traditions, let alone to use it abundantly on a pastry. It would be exuberant. So, what happens when one of the world's hottest ingredients becomes one of the hardest to get? We traveled from California's orchards to Iranian kitchens to see why pistachios are getting so expensive. Pistachios aren't native to California. Their origins can be traced back to Central Asia and the Middle East where people have eaten them for millennia. The region has a climate similar to California's with mostly dry summers.

These plants have always been picky, so big harvests were hard to cultivate even in their native land. Pistachios were regarded as a luxury mentioned in the Bible as one of the choice fruits of the land. Around 330 BC, Alexander the Great conquered the Persian Empire and brought the nut to the Mediterranean. Pistachio farms began popping up in Italy and Spain and by the 1800s in France. A seed distributor named Charles Mason brought the first pistachio nuts to California in 1854. In the years that followed, many tried to cultivate trees here, but they didn't take well to California soil and barely produced nuts. However, the US Department of Agriculture liked that pistachio trees could survive droughts.

So, in 1929, it sent its botnist to Iran to find more productive seeds. He brought back thousands and eventually one thrived. He named it Gman after the Persian province it came from. Over the next century, an entire industry grew in California from that single Iranian seed. Today, some of the oldest pistachio trees in the state can be found at Keenan Farms. They were planted before 1972. The industry was almost literally non-existent. Bob Keenan and his father Charles started farming pistachios on just a 100 acres.

Nowadays, the family gathers nuts from 20,000 acres. My father and I would laugh, can you imagine we'd ever be something like that? To grow this many nuts, they need fast machines like these that can shake off as many as 15,000 pistachios in just 5 seconds. Only trees with long, healthy roots can withstand the force. They're so big that sometimes it's even hard to shake them because they're just such a large trunk. It takes so much force and energy. Zach Raven oversees the harvest. That kind of just tells you they're ready right there when that the hole we call slips right off.

It takes about seven trees to fill one bin. The goal is to process 130 of these trailers by the end of the day. And this goes on for 8 weeks. Pistachios are one of the most expensive nuts to grow. Farmers can spend about $20,000 per acre before a single pistachio is produced. You're putting so much investment in watering it, giving it nutrition, pruning it. It's a risk. It's a gamble for all growers. And it takes 6 years for these trees to produce nuts. Twice as long as almonds. That's a long time with not getting anything in return as a grower. Unlike other nuts which produce both male and female flowers in a single tree, pistachio plants have just one or the other. Only the females produce the

nuts. The crop needs plenty of water during the summer to yield a big harvest. One acre takes more than a million gallons of water. That's enough to supply 10 households for a year. It's always about timing when it comes to these trees. giving the right amount of water at the right time. Throwing off this balance can leave up to half the pistachio shells empty. A lot of them are blanks. And there's a blank right there. Keenan's first commercial harvest in 1976 was just 500 lb. Today, the company produces millions, more than the entire state's first industrial harvest in the mid70s.

Back then, Iran still dominated the industry, exporting 20 million pounds of pistachios a year to the US. But things started to change after 1979. Several hundred Iranian students seized and occupied the American embassy in Thran. They held 52 American workers and diplomats hostage in what's known as the Iranian hostage crisis. In response, the US restricted imports on Iranian pistachios that opened up a market for California growers. A lot of likeminded farmers invested their time and energy and resources into building an industry.

Day by day, year by year, we learned a little bit about the processing which was new to California. In 1980, the state grew 27 million pounds of the nut. But a year later, Iran released the American hostages and the US lifted its embargo on the country's pistachios. Iran started shipping nuts to the US again. we couldn't face those types of competition. So, we had our lobbyist and lawyers do um some work. Kenan Farms and a few other growers petitioned the government to launch an investigation into Iranian imports. The US International Trade Commission found Iran was selling pistachios for less than they were really worth, even

cheaper than it costs to grow them. It's a strategy known as dumping. pricing goods below cost to squeeze out rivals and gain market share. In 1986, the US slapped a 241% tax on pistachios from Iran, a tax that holds to this day. And that helped our industry grow and uh become profitable. By then, the Keenan already had their first machine designed specifically for pistachios called a huller. At the time, they handfed it. Today, it's automated. Water softens the skins so they come off without damaging the shells. Once they're dry, Kenan stores the pistachios in these silos.

The big ones each hold up to 2 million pounds worth. These windows gives you an idea of how full they are. Hear that good solid sound? Solid pistachios. Yeah, it's nuts. And all those nuts have to get processed. That's where Bob's son, Mitchell Keenan, takes over. Morning. We can store about 10 million pounds inside this total warehouse here. How many pist individual pistachios? Oh my god. 25 * 16.

Maybe 4 billion nuts. somewhere around there. It's a lot of pistachios. First, computers scan for rotten pistachios. So, we try to look for any kind of sticks or rocks that might have made it into the product. No consumer wants to have insects in their product. The sorted nuts go for a ride through these tubes, which move them to their next station. It's basically a replacement for a conveyor belt. Kind of the modern way of transporting nuts. No. Next, they are sorted by color into five different shoots. Then these workers go through the pistachios again to look for defects. If

the nuts make the cut, they'll go here to get sized. Pistachios range from, you know, really tiny pistachios to big stuff. Average consumer wants an average size pistachio. The smaller nuts as well as the closed and dark ones are sent to the sheller. This is where the closed cells turn into kernels. But they have to sort these kernels too and that's trickier. A lot of the defects can blend in. Like right here, that's called spotting. So that's a defect right there. About 60% of Kenan's business comes from outside the US. This product's going to India. So, they're going to take the product and they'll actually roast it there.

The company packs and ships about 25,000 boxes on an average day. It's crunch time right now. We visited Kenan Farms before the war in Iran broke out. And now there's even more pressure on businesses like this one to move fast. Despite years of sanctions, Iran has remained one of the world's top pistachio suppliers. But when the US attacked the country in February of this year, it threw Iran's pistachio exports into chaos. By March, shipping lines were cancelling deliveries, triggering a global shortage. Pistachio prices have already jumped about 50%, hitting their highest level since 2018. This could open the door for the world's biggest producer to gain

ground, wonderful pistachios. The company farms the nut on 60,000 acres, an area about twice the size of San Francisco. I am out here generally a couple times a week. Rob Raceboro runs wonderful orchards for its owners, the Beverly Hills billionaires Stewart and Linda Resnik. I started out as the Resnik's banker and so I financed their first purchase of a pistachio orchard in 1986. Stuart said, "Well, this is a fantastic product, but the US consumer is unaware of its health benefits." And so, he took it upon himself to introduce consumers to a new product. At that time, I certainly didn't, and I doubt the Resnik

ever thought that they would become the largest pistachio grower in the world. In the early '90s, California's entire pistachio harvest grew on just 50,000 acres, smaller than Wonderful's orchards today. By then, the Resnik had reportedly captured about half the state's pistachio market. Some trees produced many more than 13,000 nuts, and some trees didn't produce as many. So, they said, "Let's see if we can identify these trees that produce so much better than the rest. We can clone those trees." Then about 10 years ago, we had successfully perfected the process to replicate those trees and to grow those and we started planting those in a big way. Today, Rob says Wonderful's trees produce 20 to 40%

more nuts than the average pistachio tree using the same amount of water. Now, the company handles about 800 million pounds of the nut per year. That's more than 500 times California's first industrial harvest. Rob says they don't leave it up to chance. This is California. There's going to be periods of drought. Let's plan ahead, but let's make sure we have the water. Early farmers in Southern California soon discovered that the soil quickly dries to dust during dry spells. For hundreds of years, farmers in the arid south looked for ways to water their crops. In California, the fundamental water problem or puzzle is that most of our water is in the north of the state. Most of the demand is in the south. So, in

the 1950s, the state pitched a massive new water delivery system called the state water project, which would pull water from Northern California. But districts could only access this new system if they paid the state back for construction. Voters approved the project in the 1960s, and California began building. With hopes of more water coming their way, farmers began planting more crops, including what are called perennials like pistachio trees that don't need to be planted annually. They can survive droughts, but to produce a harvest that's profitable, they need a lot of water. Otherwise, that loss is, you know, millions of dollars depending on the size of your ranch. We have to keep

watering them. We can't stop because the financial outcome would be just too huge. But farmers soon learned the state had been overly optimistic, estimating that the project could deliver up to 4.2 million acre feet of water per year when it would eventually supply much less than that. The state couldn't build every canal it had originally planned and other regions already had contracts to pull from the same rivers. We also have water rights holders that have obtained their water right before 1914 when we actually started keeping track of it, meaning they will take their share out first. New environmental rules enacted in the 1970s and recurring

dry spells also limited how much water the state could transport south toward farms. That was an issue for places like Kern County where millions of nut trees were maturing in the early '90s and needed water. With expansion of perennial tree crops, we've created this problem that we're up against. Then one of the longest droughts in California's history from 1987 to 1992 made the problem even worse. Water shortages resulted in a cut of up to 50% to agriculture. In the early '90s, the state stopped water deliveries to Wonderful, which relied entirely on that supply for about half its crops.

Many growers in the area turned to the aquifers to keep their trees producing. The aquifers exist in layers, right? So you can think like shallow, medium, deep. Once the shallow is overpumped, the farmers with resources go down. So the other major impact of overping is that domestic wells that serve people's homes and you know local businesses, they run dry, right? And then you're talking about people with no access to water. That's been a huge issue. But even farms, including Wonderfuls, couldn't pump what they needed because groundwater supplies were low in large parts of Kern County. That's where California was exploring a new water bank that would capture excess rainwater

from across the state and store it underground. But the project stalled for years. They eventually found a path forward. A new entity called the Kern Water Bank Authority would take control. It was made up of local water districts, agencies, and a private company owned by the Resnik, who gained about 57% control. According to Wonderful, it earned this share by paying off part of the $50 million it says was still needed to get the bank running and by giving up some of its water deliveries, which the company says would be worth over $170 million today. In the '90s, very few people want to give up entitlement to take this risk on an unproven concept of banking water.

Stuart Resnik said, "Okay, I'll take a chance." The investment paid off fast. The 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. And as luck would have it, in the mid '90s, California logged some of its wetest years on record. We've always said, "Let's not max this out. Let's always make sure we have enough resources that we can be sustainable when dry periods come. Many still object to Wonderful's outsiz share because court documents indicate that the state had already invested around $74 million to develop the bank, partly using residents water bills, and now the main stakeholder is a private company.

It's public water that we've paid for that in times of plenty should be stored for the public for the people. There are players in the system that have a disproportionate level of power. The resix are not the only uh such private interests involved but they happen to be the largest ones that stirred up a centurylong debate. Should water rights be privately controlled? Do you think it's ethical? I think it's important that people always have water.

There's been a lot of misinformation about the Kern Bank, especially during state emergencies. With regard to the wildfires in LA earlier this year, for example, LA gets its water from a completely different source, but it has absolutely no connection to the water that the wonderful company owns or controls in Kern County. That's because there's no direct infrastructure to quickly move the water from the Kern Bank to where firefighters needed it. But the Department of Water Resources did clarify that the current bank does help supplement state water deliveries to many public entities during periods of drought.

Meanwhile, environmentalists say focusing only on the resix misses a much bigger point about the state's water management. As 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. The Department of Water Resources told us its water project was designed with the best data available in the 50s and 60s. It 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.

Still, in the rat race for more water, small farmers are suffering. Rebecca Casser has watched her family's land dry out. She helps run Avalor Moore farms in the central valley. Just 9 years ago, her land was filled with pistachio and almond trees. We were 100% planted out, meaning that all of our acreage had something growing on it. But her district has younger water rights. So when there's a drought, growers here are among the first to see cuts. Farmers used to be able to pump enough groundwater to keep their trees producing during droughts. But in 2014, California passed a law called the Sustainable Groundwater Management Act,

or Sigma, which barred growers from pumping more groundwater than natural sources like rainfall could replenish. In some districts, each piece of land was assigned a set number of water credits. But that often wasn't enough for thirsty crops. So to keep their trees producing, farmers left some fields unplanted, a process called. We followed out over 60% of our farm so that we'd be able to have the water in order to irrigate our plantings. To save their pistachios, some farmers were forced to buy more land just to collect extra water credits and left the new fields unplanted. So, we started picking up more fow acorage. Uh 20 acres here, 20 acres there.

Ultimately, Sigma could take about 900,000 acres out of production in California's main crop growing region by 2040. That's roughly 20% of the irrigated farmland in the Sanwaqin Valley. Reports project that much of the remaining crop land could go to nut plantations like pistachios with acreage expected to grow by about 40% between 2023 and 2031. the folks that have the water are using it on their high value tree crops to the detriment of other things. California doesn't just produce, you know, the majority of the nut crop. California produces the majority of the fresh fruits and vegetables in the country. And if the ability to do that gets impacted, you're going to start to

see price shocks. As for which crops take the biggest hit is very much a function of whether any of the farmers have more or less access to whatever surface water is available and wonderful has that advantage because of the bank. The best thing about the water bank is it doesn't use groundwater. It uses stored surface water. It's a tool that you can use to manage through droughts. Wonderful has shifted some pomegranate and almond acreage too, helping to double plantings of its top crop over the past decade. And part of that is because of how we view the market and our leadership position in the pistachio industry and

what kind of competitive advantage we have. We could brand every one of our wonderfully delicious pistachios with the word wonderful on them or we could just write it once. My mission is to get the world to eat more pistachios. Diana Salsa helps run marketing for Wonderful. The team led the company's 2009 Get Kraken campaign, featuring new packaging. More people were aware that pistachios now came in this iconic black bag. Before that, pistachios were really sold in bulk.

Within just a few months of the launch, Wonderful sales surged more than 220%. Is that honey? We invest millions of dollars consistently to make the whole world aware of pistachios. By 2016, the US was dominating the global supply, outpacing Iran, and has remained the top producer ever since. The Resniks have invested over a billion dollars to be able to handle the demand as our supply and trees continue to grow. In America alone, Wonderful Pistachios was retailing $1 billion worth of nuts annually by 2020. Three years later, the Dubai chocolate trend boosted demand fast and drove pistachio kernel prices up nearly 35% between 2024 and 2025.

Experts now project the pistachio market will grow from about $5.6 billion in 2025 to over 7 billion by 2030. But there's a catch. If prices keep rising the way they have in recent years, analysts say pistachios could get too expensive to use this widely and brands may start swapping them out for cheaper nuts. Right now, the US supplies more than 60% of the world's pistachios. And until 2025, China was largely the top buyer, but they've imposed tariffs on American nuts, making them more expensive. As a result, imports dropped by over 50% in the last year. That opened a door for Iran to take some of the Chinese market from the US.

Over the years, even as California became the top producer, Iran remained a big player, supplying about 16% of the world's pistachios in 2025, mostly to China, Turkey, India, and the UAE. Only a tiny share of Iran's pistachios ever make it to the US. Each year, New York City restaurant tour Nasim Alikani brings back a single bag for herself from her trips home to Iran. I was in Iran in February and I just brought this with me. They're meteor lighter. Clearly see a difference between these and what we have here in this country.

She runs Sopre, a Persian restaurant that highlights ingredients from her homeland. Pistachu hold a quite special place in my heart as well as Iranians. She made us a few sample items from her menu. From very early on, I realized pistachu are a real treasure and they should be acknowledged as such. See this? This is nice. We use them in this very elegant shape. Look how tiny they have been sliced. She reserves that single bag of Iranian pistachios for one cookie on the menu. They are so delicate that we use them as a garnishes for really special dishes. But sanctions have made Iranian pistachios hard to find in America and

much more expensive. So she rarely cooks with them. It would be exuberant in terms of the cost. She says prices have soared in Iran too as tensions escalated with Israel in 2025, disrupting supply chains. Extreme weather has also made it hard to keep the conditions just right for pistachios. So they've become even more precious and expensive. But right now many people can't afford it. By just being eliminated from our sphere of our eating habit, then it becomes part of the culture being eliminated in the long run. Preserving those authentic Persian flavors matters deeply to Nasim and it's what keeps her regulars coming back. When I think of Persian food, I think about pistachios. There'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. I think we didn't have access to Persian ingredients out on the things that make food rich, the things that make food zesty. I live for pistachios. I'm Syrian. I was born in Syria and they're very big on pistachios. It's a very um nostalgic food. The restaurant's most popular dessert, saffron ice cream, is made with California pistachios, but Nasim still uses them sparingly, acutely aware of the true cost of this nut.

It's been a pattern in this country that we get somebody else's seeds and we grow it and we make it bigger. I am sure that somebody's suffering. Maybe a small farmer is suffering. Maybe land is suffering. Something is not right because these pistachios are kind of inexpensive for what they should be. Back in California, Kenan Farms is still trying to keep some of the oldest groves productive. This is one of the original plantings in California and she's still producing. It's kind of neat. It's kind of like uh you're in a museum. You know, you're part of something that started many, many years ago.

The Kenan say they would have never predicted back then how hard it would eventually be to keep these trees producing. Consistency of supply. That's where California has thrived. It 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. But that demand means farmers need to keep up no matter how challenging that may be. So as a smaller farm, we've had to be really innovative and resilient with regards to the water issues that we're dealing with. We want to do right by the soil and we want to take care of the resources.

We've been in this game for a while and it's our passion and our legacy. In order to stay relevant, uh, we're just going to have to continue to be creative.