BY CALEB HAMPTON<\/p>\n
AgAlert<\/p>\n
California farmers are in the midst of harvesting an almond crop that may be among the largest on record.\u00a0<\/p>\n
Or perhaps yields won\u2019t be so big. A month into harvest, that\u2019s the billion-dollar question.\u00a0<\/p>\n
After farming at a loss for as many as five consecutive years, almond growers watched prices climb for much of the past year, promising a return to profitability. Then, on the eve of harvest, the U.S. Department of Agriculture released an unexpectedly high crop forecast of 3 billion pounds.\u00a0<\/p>\n
\u201cThat shocked the market,\u201d said Ali Amin, owner of Primex International Trading, a major nut exporter based in Los Angeles. \u201cNobody expected it.\u201d<\/p>\n
Anticipating a glut, buyers pulled back, causing almond prices to drop nearly 20% overnight. The reaction erased roughly a billion dollars from the total crop value\u2014last year\u2019s almond crop sold for $5.7 billion\u2014and it eliminated the profit margin for many farmers. \u00a0<\/p>\n
\u201cIt took the wind out of the growers,\u201d said Jasbir Sidhu, who began harvesting almonds the first week of August. In his orchards in Fresno and Madera counties, output appeared well short of the forecast, with small kernel sizes dragging yields down by 20%, Sidhu estimated.\u00a0<\/p>\n
As of last week, almond growers and processors said it was likely too early to evaluate the crop size. Mel Machado, chief agricultural officer at Blue Diamond Growers, the world\u2019s largest almond processor, said the cooperative began receiving nuts less than two weeks ago at its Central Valley facilities.<\/p>\n
\u201cI can\u2019t pass judgment on this crop at all right now,\u201d Machado said.\u00a0<\/p>\n
Still, based on early yields, some growers and processors were skeptical of USDA\u2019s July 10 forecast. Only once, in 2020, has California produced 3 billion pounds of almonds.\u00a0<\/p>\n
\u201cWe don\u2019t see that crop being out there,\u201d said Jake Barcellos, who grows almonds in Merced and Fresno counties. Roughly a third of the way through harvest, Barcellos estimated his yields were 15% below average. \u00a0<\/p>\n
Since dropping in July, almond prices have crept upward. It may indicate doubts about the crop forecast, Amin said, while also reflecting an uptick in shipments.<\/p>\n
\u201cIn the short term, sentiments can influence the market,\u201d he said. \u201cIn the long term, of course, it\u2019s supply and demand.\u201d<\/p>\n
California\u2019s almond acreage roughly doubled during the past 15 years, peaking in 2021 at 1.64 million. Since then, orchard removals outnumbered new plantings as growers responded to a saturated market.<\/p>\n
In Tehama County, Tyler Christensen pulled his almond trees out a couple years ago. \u201cIt\u2019s just economics,\u201d said Christensen, who still grows prunes and walnuts.<\/p>\n
Despite more removals, the state\u2019s almond production has yet to turn around as maturation of recent plantings raised bearing acreage\u2014trees at least 4 years old\u2014this year to 1.39 million.<\/p>\n
\u201cThe dynamics of the industry are very concerning,\u201d said Jessica Davis, manager of sales and shipping at Sierra Valley Almonds, a Madera-based processor. \u201cDemand is flat, and total supply is not shrinking yet. That\u2019s why you see these depressing moments of market pricing that cause a lot of concern for growers.\u201d\u00a0<\/p>\n
In 2014, a pound of almonds sold for a record $4. Since 2020, prices have averaged $1.77 per pound. Growers typically need to earn $2 or more per pound to break even.<\/p>\n
During the past 12 months, California shipped 2.65 billion pounds of almonds, down slightly from the prior year, according to data from the Almond Board of California. The decline was mostly driven by an 8% drop in domestic sales, possibly due to the impact of inflation on consumer habits.\u00a0<\/p>\n
\u201cThe buying power of money is thinner than it was,\u201d Davis said. \u201cPeople\u2019s dietary choices and food trends have changed.\u201d<\/p>\n
Exports fared better. They increased slightly during the past year amid warnings the Trump administration\u2019s trade policies could upend international markets. From last August through this July, foreign buyers purchased 75% of California\u2019s almonds.\u00a0<\/p>\n
\u201cThere have been some effects from the tariffs, but probably not big enough to affect almond prices very much,\u201d said Dan Sumner, professor of agricultural and resource economics at the University of California, Davis. \u00a0<\/p>\n
That\u2019s partly because\u2014with the exception of China\u2014countries impacted this year by U.S. tariffs have so far not responded by putting retaliatory tariffs on almonds.\u00a0<\/p>\n
The administration\u2019s on-and-off tariffs may still have contributed to softer pricing, Sumner said, if exporters were pushed to discount California nuts to compensate buyers for the risk of potential tariffs.<\/p>\n
The U.S.\u2019s recent trade conflict with India has especially high stakes for California almond growers. Earlier this month, the U.S. imposed 25% tariffs on India, which as of Monday were set to double this week.\u00a0<\/p>\n
India is the largest foreign market for California almonds, last year accounting for more than a fifth of exports. The South Asian country\u2019s status as the world\u2019s most populous country, its growing middle class and its taste for almonds as both a snack and an ingredient have made it a primary target for market growth.\u00a0<\/p>\n
\u201cThe feeling is that there\u2019s still a lot of room for expansion,\u201d Julie Adams, vice president of global technical and regulatory affairs at the almond board, said of the Indian market.<\/p>\n
China, the top destination for California almonds less than a decade ago, largely shifted to purchasing Australian nuts amid a yearslong trade war with the U.S. In turn, California marketers\u2014in addition to selling more to India\u2014have sought new buyers in countries such as Morocco, Turkey and the United Arab Emirates.\u00a0<\/p>\n
\u201cFostering that diversification is extremely important,\u201d Adams said. \u201cYou never know when there are going to be issues in a particular country.\u201d<\/p>\n
Meanwhile, economic stress has mounted for growers struggling with high input costs, low prices and other challenges.<\/p>\n
Fresno County farmer Joe Del Bosque said he removed about a quarter of his almond acreage a couple years ago and has left the ground open due to a lack of promising alternatives.\u00a0<\/p>\n
\u201cA lot of almonds in our area were taken out the last three years,\u201d Del Bosque said, adding that other growers also appeared hesitant to replant. \u201cI see an awful lot of land out here with nothing on it.\u201d<\/p>\n
Sidhu, who serves as a director of the Punjabi American Growers Group, said almond growers were cutting back on irrigation, hired labor and other expenses \u201cbecause there is no money.\u201d<\/p>\n
Family farmers without off-farm income have maxed out credit lines and defaulted on bank payments, he said, with some nearing bankruptcy.\u00a0<\/p>\n
\u201cA lot of people are trying to get out,\u201d Sidhu said. \u201cYou wake up at 5 in the morning and work until 10 at night, and you can\u2019t break even.\u201d<\/p>\n
\u2014 Courtesy of the California Farm Bureau. <\/p>\n
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