Record almond crop eats growers’ profits
The objective almond forecast for the 2001-02 California crop, revealed June 28 by the California Agricultural Statistics Service, is 850 million meat pounds. That’s 21.8 percent more nuts than last year’s crop.
A record crop would be good news—if not for the farmer-foiling nature of the global market. When fewer farmers were growing almonds, in the early and mid 1990s, the nuts fetched almost $3 a pound and times were good. But more orchards being planted and years of bumper crops drove the price down to as low as 85 cents last year. It’s classic supply and demand but frustrating to farmers who want to grow good nuts and be rewarded for it.
“It causes a lot of stress, and you’ve got some sleepless nights,” said Dan Cummings, a Chico almond grower who is vice chairman of the Almond Board of California’s board of directors. The only way for farmers to avoid getting completely depressed is to keep planning 10 years into the future.
The board was set to meet July 12 to review the forecast and its implications.
For the most part, they already see the writing on the wall.
With so many nuts, and handlers selling them to the lowest bidder, farmers this year aren’t expecting much more than $1 a pound, Cummings said. And figuring that it takes about $1.50 to produce a pound of almonds, it’s not hard to do the math.
“You’re selling your almonds below the cost of production,” he said. “People are watching the equity in their businesses go down every year, and a lot of friends and neighbors are on the ropes. It’s a sad thing to watch.”
The year’s crop will also include a 106-pound carryout from last year’s that will be added to the supply, making for almost a billion pounds of almonds—too many to be profitable. Even the ever-increasing almond consumption the industry has enjoyed in the last two decades won’t compensate, Cummings said.
The objective forecast, which follows a less-accurate subjective count in May, predicts the crop’s yield by actually counting young nuts in the trees. The objective forecast was 2.9 percent less than the subjective this time.
The average nut set per tree was 6,672—up 26 percent from last year. The favored nonpareil variety’s set was even higher, although kernel weight was down 5 percent for all types.
Just a couple of weeks ago, the Butte County Board of Supervisors requested that the U.S. Secretary of Agriculture declare a state of disaster because of trees lost to freeze in April. About $24 million was estimated lost, more than $1 million of that in almonds. Add that to March winds that downed trees totaling $3 million in losses, and it’s more bad news for growers, who, saddled with increased labor and fuel costs, are investing in their farms by pulling out their oldest trees to plant new ones that will take several years to produce.
"It’s frightening," Cummings said. "The way things will get better is when supply and demand comes into better balance."