Harvest is underway for what’s been forecast as a record almond crop, and growers say despite prices having dropped from their peaks a year ago, they see good market prospects for this year’s crop.
The U.S. Department of Agriculture estimated the state’s 900,000 bearing acres will produce 2.05 billion pounds of almonds this season. That’s up nearly 8 percent from last year and larger than the record 2.03 billion-pound crop of 2011.
After almond prices fell by nearly half last year, growers and others in the business say the market is now stabilizing and almond sales have picked up. Reduced prices, in turn, have helped to revive demand for almonds, with record shipments in the last three months, said Richard Waycott, president and CEO of the Almond Board of California.
“We’re ending the (marketing) year on a major upswing in terms of demand and volume,” he said. “It looks like that will carry over well into the coming year.”
Glenn County grower Dan Cummings said he thinks almond prices got up to unprecedented highs—at more than $4 a pound—because supplies did not keep up with demand. The drought, he said, suppressed any real growth in production, while demand for almonds continued to rise.
“We needed bigger crops, frankly,” Cummings said. “Hopefully, the drought is behind us and the industry will benefit from these larger crops.”
With improved yields on existing orchards, new trees coming into production and growers expanding almond acreage by 2 to 3 percent a year, Waycott said the USDA estimate appears to be “a pretty good number.”
But he agreed that despite increasing almond acreage, production in the last several years declined or remained static “primarily due to drought-related factors.”
“If we went into this year with less stress on those trees, I think the crop would be bigger,” said David Doll, University of California Cooperative Extension pomology farm advisor. “I think the reason we’re probably going to break the record is we really have a lot more acreage.”
Whereas the 2011 record crop yielded the highest per acre in the state’s modern production history, Doll described this year’s crop as “just good.” The biggest difference between this year and last year, he said, is the amount of surface water flowing to trees on the east side of the San Joaquin Valley, noting that irrigation districts in the Sacramento-San Joaquin Delta and to the north have received their full contracted allocations this year.
Meanwhile, farmers on the west side of the valley continue to struggle with water scarcity, with many of them also dealing with high salinity in groundwater that’s damaging the health of their trees. For those farmers, Doll said, this year is actually worse than last year, in that they’re facing yet another year of little or no surface water.
San Joaquin County grower Bill Koster, who started harvest last week, said he is still operating in a “drought mode,” with 5 percent water allocation coming from the federal Central Valley Project.
“We’re running well water that’s high in salts, and it’s taken a toll on the trees,” he said.
Rainfall from last winter and other management techniques have helped to reduce soil salinity to keep his trees alive, but Koster said he’s also not “gaining any ground” because he’s back to irrigating with groundwater during these summer months, accumulating more salt and harmful minerals, and “compounding the problem.”
Despite the stress on his trees, Koster said he’s able to produce a “fair” crop that allows him to maintain a “slim profit, considering the price of water at $400 an acre-foot.”
In Solano County, access to water was not a problem for farmer Tom Monk this year. Monk said his crop so far looks 5 to 10 percent smaller than last year’s, citing weather and a short bloom as possible factors.
He said though prices for some lower-priced almond varieties “could come up quite a bit,” he’s able to pay his bills with the current price.
“You can’t have big prices every year,” he said. “The price levels out year to year. I’d like to have a little bit more, but I’m fine with it.”
At the average going rate of $2.50 a pound for the premium nonpareils, Jim Jasper, owner and president of Stewart and Jasper Orchards, an almond grower and processor in Stanislaus County, said the price level is “still profitable” for farmers and allows them to “produce a lot of almonds and fill a lot of markets.”
“Personally, I thought the price a year ago got way too high and wasn’t sustainable,” he said. “It was very evident that it wasn’t going to stay there.”
Waycott described high almond prices, coupled with the strength of the dollar as “a double whammy,” leading some price-sensitive markets overseas to pull back on almond imports, while U.S. demand also dipped. Now that prices are more leveled, Jasper said he thinks “more people will want to use (almonds) and find more uses for them.”
“As a farmer, I like a more-stable market and a fair return,” Jasper said, “and buyers throughout the world want confidence in a commodity and not have prices dropping or rising really fast.”
As to having to market a potentially larger crop this year, Waycott said he does not consider any of the current markets “as being mature,” noting that in key markets such as North America and western Europe, there’s still “a long way to go” in raising per capita consumption.
Development of new products using almonds continues to help make market inroads, Waycott said. He noted the “phenomenon” of almond beverages in western Europe, Asia and Australia, while almond flour and almond butter are becoming more prevalent in markets worldwide. Also, for the first time this year, almonds became the most frequently used nut ingredient in chocolate products in Europe, a market previously dominated by hazelnuts and peanuts.
“That was quite a milestone for us,” Waycott said.
Permission for use is granted by the California Farm Bureau Federation. Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.