As companies go, Horizon Nut is relatively young.
Born in 2008 after a group of San Joaquin Valley (SJV) pistachio growers saw a need for additional processing capacity, the next phase of the company’s growth is moving dirt on fallowed farmland in western Fresno County.
The initial vision of 20 pistachio growers, who combined produce about 70 percent of the state’s pistachio crop, led to the acquisition of a hulling and drying facility in Lost Hills, Calif. and a processing plant at the north end of Tulare, Calif.
As the capacities at Lost Hills and Tulare rose from 30 million to 50 million pounds within the next few years, Horizon’s ownership again saw the need to expand with the pistachio industry, which in 2014 produced over 500 million pounds of nuts in the western United States. Roughly 99 percent of those nuts are produced in California, according to the California Department of Food and Agriculture.
Horizon Nut is a private company with a progressive board of directors says company President Ted Sheely and chairman of the board of directors. Sheely farms a variety of crops on several thousand acres of farmland on the Westlands Water District and along the Kings River, including pistachios, cotton, grains, grapes, onions, tomatoes, garlic and Garbanzo beans.
Sheely also owns a separate company called AzCal Management, which has various farming interests in Arizona and California.
New Firebaugh facility
Firebaugh, Calif. sits in western Fresno County at ground-zero in California’s water woes. Though irrigation water curtailments expanded throughout the state in 2014, those cutbacks hit Firebaugh and nearby Mendota first with the forced fallowing of land and unemployment that exceeded 40 percent.
By late 2013 Horizon once again saw the need to expand its processing capacity and Firebaugh proved to be an excellent location to build a new pistachio processing facility for a number of reasons, according to Sheely.
With the high unemployment of farm labor in the area the area has a workforce familiar with agriculture that community leaders say is willing to work.
Land and water availability were also key factors, according to Sheely. Ironically, water is available in Firebaugh, but Horizon had to drill deep to get it. Land too is available as Westlands Water District, a major land owner in the area, was forced because of federal water cutbacks to retire about 100,000 acres of good farmland in order to make a shrinking pool of water available elsewhere within the district.
Horizon purchased 1,200 acres of Westlands property southwest of Firebaugh. Because Westlands is a public agency it pays no property taxes. Sheely says Horizon’s purchase of the land immediately returned it to Fresno County tax rolls, a benefit that was not lost on county supervisors.
According to Sheely, county supervisors were quite accommodating through the permitting and planning process.
Further willing to work with Horizon ownership is the nearby West Hills Community College. Sheely says the community college district will partner with Horizon to help educate the workforce Horizon will need to process pistachios.
Horizon expects to employ 175 full time and 300 part time workers as the plant reaches capacity.
The use of recycled water was also a factor in the Firebaugh purchase, according to Sheely.
Horizon will use approximately 40 acres for the processing site. The additional acreage will grow commercial crops that will be irrigated with the water used in the processing facilities. Two wells currently being drilled on site will provide all of the water needs for the facility, though surface water from Westlands Water District could be purchased to supply processing needs.
Unlike the Tulare facility, which has no room for expansion or the ability to hull and dry pistachios, the Firebaugh facility will include hulling, drying and processing. It will start with the capacity to process 15 million pounds of nuts. Future expansion plans seek to boost capacity to 60 million pounds, according to Sheely.
As a grower Sheely wants a good home for his pistachios and Horizon provides that. While the Horizon LLC allows owners to bring in part or all of their pistachio crop for processing, Sheely chooses to have 100 percent of his production processed through the company.
Growth in the overall pistachio industry throughout California also demands the additional processing capacity.
“Existing facilities in the state cannot handle the expected crop six years from now,” Sheely says.
Projections from the American Pistachio Growers suggest domestic production could exceed one billion pounds within that time, which would effectively double today’s crop.
Horizon Nut does not market pistachios itself; it merely processes them for sale to domestic and international buyers. Meridian Nut Company in Fresno, Calif. provides the marketing services for Horizon.
Sheely has been a long-time grower of cotton in the San Joaquin Valley. He previously served on the board of Cotton Inc. and currently serves as vice chairman of Supima, a marketer of premium cotton grown from West Texas to California.
“It took me 20 years of growing cotton to plant my first pistachios,” Sheely said. “We didn’t go out and borrow the money for our pistachios, we earned it.”
Sheely’s pistachio trees range in age from six to 18 years. He sources his trees from Pioneer Nursery owners Ken Puryear and Corky Anderson, who also are part of the Horizon ownership group.
“I did business with them before we were partners in Horizon,” Sheely said.
Started in cotton
Sheely’s start in pistachios came after decades of farming Upland and Pima varieties of cotton. He knew nothing about pistachios at the time but could see the economic benefit in growing them. For the first four years into his adventure with pistachios Sheely employed a contract farm manager to teach him about pistachios.
“I needed someone to help me with the big decisions involved in such an investment,” Sheely said.
Sheely is now keen to various challenges in growing pistachios, including pest and disease issues. The Navel orangeworm (NOW) is a pest he is constantly managing against.
“We work on that unbelievably hard,” he said of his field sanitation efforts.
University experts recommend removing nut mummies from trees during the dormant season and plowing them into the soil or mowing them to prevent locations for overwintering NOW from finding a home in orchards.
He also uses a native grass cover crop that in the winter months with moisture from rain or fog can help decompose nut mummies that are knocked off trees and blown into the center of the rows.
Over the years Sheely’s cotton acreage has shrunk considerably, down from a high of 8,000 acres to 1,800 today. His Upland cotton is grown for seed and sold to Phytogen. His Pima cotton spins its way into some of the finest fabrics sold worldwide under the Supima license.
As a farmer in and at one point a director for the Westlands Water District, Sheely is well-aware of water issues. The limited availability of surface water in 2014 caused irrigation water prices to spike to well over $1,000 per acre foot throughout California, bringing with it a whole set of new challenges.
The transition to high-value, permanent crops is just one of those consequences as water prices are too high for growers to produce certain crops. Cotton and other row crops are some of those negatively impacted by the high water costs.
“Growing grain is not cost-effective with these high prices for water,” he said. “But, there’s a value in that building up my soil as a rotational crop.”
For crops like winter grains it can also spread out his irrigation schedule.
“We’re all the time looking for different ways to effectively run the farm,” he said.
About 35 percent of his acreage is in permanent crops with the rest in annual crops.
“This year we took a gamble and planted 3,000 acres of winter grain,” he continued.
Sheely echoes the concerns of other SJV pistachio growers by highlighting water concerns and a marked reduction in chilling hours over the past several years as considerable challenges for growers in the years to come.