The pistachio industry has a significant economic impact on California’s economy, contributing $6.4 billion annually, according to a new study.

In January, American Pistachio Growers, a nonprofit trade association, commissioned Dennis Tootelian, a business consultant and emeritus professor of marketing at California State University-Sacramento, to assess the economic impact pistachio growers and processors have on California’s economy.

The nonprofit commissioned similar studies in 2017 and 2021.

“With every economic study of the industry, the numbers keep getting more and more impressive,” said Tootelian.

The industry continues to expand. Between 2016 to 2020, growers added 173,540 pistachio acres, a 56% increase. Between 2020 and 2022, they added 74,614 acres, a 20% increase.

In 2022, bearing acreage hit 446,000 acres statewide.

Farmers say they are planting pistachios for many reasons. Some are growing pistachios because the trees are well-suited to desert environments with limited water. Others say they like that pistachio prices stay relatively stable throughout the year. Some are interested in creating value-added products. Yet others see an opportunity to meet rising global consumer demand.

As pistachio acreage increases, Tootelian said, so does the industry’s economic impact.

“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,” he said.

Pistachio growers and processors contribute to the state’s economy more than $6.4 billion in annual economic output, the best measure of economic activity, according to the study. That amounted to about $17.6 million in economic output per day in 2022.

The economic impact is not just measured by the total value of goods and services. The pistachio industry also has many indirect effects.

Tootelian computed the economic impact using a multiplier effect with an analytical software program called IMPLAN and other tools.

To understand the multiplier effect, imagine throwing a stone into a pond and watching the concentric circles of ripples. The stone is the pistachio industry. The inner circle represents direct effects — expenditures on pistachios. The middle circle represents indirect effects, such as payments to suppliers. The outer circle represents income-induced effects, which work like this: An orchard worker might spend part of his or her salary on buying groceries. Although the grocery store is not dependent on that one person’s purchase, the sum of many such payments supports the store. In this way, the pistachio industry impacts the overall economy.

The industry, said Tootelian, has ripple effects that impact an array of sectors including real estate, professional services, construction, insurance and retailing.

The pistachio industry’s spending helped create 55,100 full-time-equivalent jobs in 2022, according to the report. It also generated nearly $3 billion in labor income.

The report found that in 2022, the industry contributed more than $230.9 million in indirect business taxes, not including income taxes, to the state. This equates to more than $632,600 per day in tax revenue.

“These findings demonstrate the important role pistachio growers and processors play in strengthening the economic climate of the state,” the report said.