Bob Klein, manager of the California Pistachio Research Board, had a sobering story to tell when he addressed growers in Visalia at Statewide Pistachio Day.
Pistachio growers shipped their product to Europe year after year, dominating the market through the late 1990s. Then the public protested a toxin in the nuts. The outcry lead to a ban on pistachio exports from the country, and growers in competing countries swept in.
The growers who lost market share? They were Iranian. The ban led to a foothold for U.S. pistachios in the European market. The market disruption had a price: European pistachio consumption declined by more than 70% and took more than a decade to recover.
Although the story represents a win for U.S. pistachio growers, it’s also an example of what can happen when an export market turns off its spigot for tree nuts, Klein said: You can expect major impacts on your markets.
“It's not like lettuce or any of the leafy greens where consumption comes back in a year or two and you can control supply by not planting,” Klein said.
Klein’s mission is to make sure this piece of the past is not prologue for U.S. pistachio growers: as mycotoxin levels have attracted steady scrutiny from EU regulators, Klein hopes to help growers cut down on factors that lead to rejected shipments, and could lead to much worse.
“European Union imports are down about 10% year over year from the previous year to date,” Klein said. “If we lose a market when we have these large crops coming on, it could be tragic.”
The European Union has a very different perspective from U.S. food safety regulators, who care about microbiological contamination and outbreaks of E. Coli and Salmonella, he told the crowd.
“The EU virtually doesn't care about microbiological contamination, they're only concerned about alfatoxin,” Klein said.
Virtually all countries have regulations on mycotoxin in food, and it’s not just nuts that are affected: grains also are examined for mycotoxin, and dried fruit and spices. Aflatoxin is the main toxin associated with tree nuts.
“About 25-30 percent of our crop goes to the EU, and the EU is one of the markets that regularly tests (for aflatoxin),” Klein said. “They regulate, and they regulate stringently.”
The way the testing works is that inspectors examine two 10-kg samples, and if either tests positive for aflatoxin, the lot is rejected. Each rejected lot costs $30,000 to return.
EU Aflatoxin Warnings
In the 2000s, Klein said that the EU sent an audit team after aflatoxin cropped up. The team recommended the pistachio industry develop an export program.
“We didn't, in large part because the problems largely disappeared with a superior quality 2010 crop,” Klein said.
That wasn’t the end of the EU regulators’ warnings, though.
“U.S. pistachios were placed on what they called enhanced surveillance in 2015,” Klein said. “We also had another EU audit come in in September. of last year, and they are essentially insisting we develop a formal control system.”
The pistachio industry currently has problems at the processors right now with getting enough crop to ship to Europe, Klein said, warning that a lack of steady supply means a lack of shelf space, and lower sales.
Klein said European Union imports are down about 10% year over year from the previous year to date.
“If we lose a market when we have these large crops coming on, it could be tragic,” he said.
A new threat
As if growers didn’t have enough to worry about, there’s a new mycotoxin that’s causing as many rejected shipments as aflatoxin, Klein said, and its name is Ochratoxin A, or OTA for short.
The California Pistachio Research Board has begun investigating OTA, Klein said, by testing testing library samples from the 2016 crop.
“I'm not going to share numbers, but they do not look good,” he told growers. “There were some thoughts we might not find any, and we're finding plenty in library stocks. We're expecting it to be a similar level as aflatoxin is in pistachios.”
While OTA is far less to toxic to humans than aflatoxin, Klein said that it’s possible most EU countries could test at the border for both aflatoxin and OTA, doubling rejections.
OTA doesn’t pose the same risk to human health as aflatoxin, some studies show.
“If consumers boycott pistachios due to OTA levels even though they don't have a scientific reason to do so, that still doesn't make any difference, we'd still be on the losing end of that,” Klein said.
What can growers do?
On the positive side, Klein told the crowd, competing Iranian pistachios have about double the rejections of California’s.
He said that growers may be able address mycotoxins by improving navel orangeworm and other pest sanitation.
Aflatoxin growth is predominantly something that happens in the field, he told growers. Once nuts go to the huller and sheller, moisture level in the nuts drops down to less than 7%, a level at which there is no activity of the fungus.
Klein said 90% of the aflatoxin rejection comes from navel orangeworm-contaminated nuts. There’s no predictive value that the research board has identified, but generally speaking, as harvest gets later and navel orangeworm damage goes up, aflatoxin presence does too.
“Every grower needs to have a multifaceted program in place,” Klein told the growers. “If you're delivering over 2% (navel orangeworm damaged nuts), your program is a failure and you need to look at it from the ground up…looking at the long term, it can't be tolerated in the export markets.”