California pistachio growers say the crop coming off this year’s trees is bigger than expected.

Although individual nuts are smaller due to widespread drought, this year’s overall pistachio crop is the second-largest on record because of high acreage. At about 1 billion pounds, the California crop is weighing in just under last year’s record 1.05 billion pounds. Industry leaders also predict strong domestic and international markets this year.

Pistachios rank No. 4 among California’s top agricultural commodities, behind milk, almonds and grapes. In 2020, the crop’s production value was $2.87 billion.

“The nuts are much smaller than normal, but there are more of them,” said Richard Matoian, president of American Pistachio Growers, an industry group. “I absolutely think there will be sufficient global demand. Regardless of what size you have, people want pistachios.”

In July, Matoian and other industry leaders had predicted the crop would fall between 850 million to 940 million pounds due to drought and heat, but tonnage reports from packers and processors Sept. 30 showed higher volumes than predicted.

Growers say the San Joaquin Valley especially, with its fertile soils, hot, arid climate and moderate winters, had large yields.

Growers started picking around Aug. 23, are now doing second shakes on trees and are expected to wrap up harvest by the third week of October.

One billion pounds is a large volume for this “off” year in the pistachio industry. Pistachios are alternate-bearing, meaning the trees produce a heavy crop yield one year and a lighter yield the next. This year is technically an “off” year for the crop, so growers say they expect a crop well above 1 billion pounds in 2022, an “on” year.

Pistachios this year are generally smaller, 21s to 25s, with fewer larger nuts in the 16s to 20s range. These numbers equate the number of nuts found in one ounce, so the larger the number, the smaller the nut.

Larger nuts sell at a higher premium. However, Matoian said previous years’ markets show that people buy pistachios even if the nuts are smaller, and there’s no shortage of demand this year.

According to the U.S. Administrative Committee for Pistachios, Iran follows the U.S. as the world’s second largest pistachio producer, producing a total crop of more than 418 million pounds in 2020.

This year, however, the Iran Pistachio Association reported that Iranian growers lost about 50% of their crop due to severe frost and heat damage. According to a report from the International Nut and Dried Fruit Council, Turkey, the third-largest pistachio producing nation, is also expected to have a “very low” crop this year compared to average.

These global production losses leave gaps for U.S. producers to fill. About 65% to 70% of U.S. pistachios are exported, so Matoian said this year’s global market is in America’s favor.

Although growers are generally positive about this year’s crop and market, Matoian said many are already strategizing about how to produce larger nuts and keep trees healthy through a potential multi-year drought.

The industry, he said, is exploring irrigation techniques, pushing legislators for better water infrastructure and exploring temporary water transfers.