California almond growers are feeling the squeeze
Almond producer David Phippen didn’t want to listen to the newest predictions from agriculture economists to know that his business was on the verge of dropping its premier place within the world market.
He noticed it coming throughout the COVID-19 pandemic in 2020, when oceanic carriers found they may make twice as many annual spherical journeys — and better revenue margins — by sending empty containers again to Asia to select up extra items for export as an alternative of ready in port right here to be loaded along with his almonds. Almond exports are down by about 13% this yr, business officers stated.
“It’s all about cash,” Phippen, 72, stated, shaking his head in frustration on a current sizzling and sticky morning. “After years of prospering collectively, overseas transport vessels have determined to cease servicing us.”
Now, the powerhouse almond business is in a pickle. Roughly 7,600 California farms produce 82% of the world’s almonds. However they don’t receives a commission till their product will get delivered in strong markets just like the European Union, China, India and the United Arab Emirates.
Because of this, the prospect of harvesting 2.8 billion kilos this yr — simply shy of the two.9 billion kilos in 2021 and the file 3.1 billion kilos in 2020 — has business leaders each excited and nervous. That’s as a result of about 1.3 billion kilos of unsold almonds are nonetheless sitting in piles at processing and packing amenities.
The issue comes at a time when inflation and a historic drought are pushing the prices of manufacturing and water provides to an all-time excessive, and the value of almonds has fallen to an all-time low of about $2 per pound.
It’s a pointy reversal for the business after 4 many years of relentless enlargement throughout 1.6 million acres in California’s agricultural Central Valley from Tehama County to southern Fresno County.
“We’re working right into a supply and cash-flow disaster,” stated Aubrey Bettencourt, chief government of the Almond Alliance of California. “From final September to February, the almond business misplaced $2 billion in worth — that’s some huge cash that’s not going into our communities.”
“If we are able to’t deal with this drawback,” she added, “our merchandise shall be changed with one thing else.”
It’s a dilemma that David Phippen and his brother Scott, companions of Travaille & Phippen Inc., a family-owned rising, processing, packing and gross sales enterprise in Manteca, Calif., know firsthand.
“The large query from prospects world wide nowadays,” Scott Phippen, 68, stated, “is that this: When will we get our almonds?”
The bottleneck on the Port of Oakland, traditionally the key gateway for Central California dried fruits and nuts sure for worldwide markets, is anticipated to tug on for months to come back.
The excellent news, growers wish to level out, is that the nutritious oval-shaped nuts have a shelf lifetime of about two years.
As a part of an effort to keep away from being overwhelmed by new crops anticipated to reach in September, the Phippens are constructing a 40,000-square-foot warehouse, and just lately paid about $800,000 for 3,000 new wood storage bins.
Inside a close-by processing facility, employees carrying gloves and hairnets have been inspecting rivers of almonds flowing alongside conveyor belts earlier than they’d be packaged for cargo.
“We’ve got loads of almonds,” David Phippen stated. “The issue is getting them to individuals who pays for them.”
The crunchy nuts have come a good distance since California pioneers in 1850 planted their first almond bushes in Sacramento, Monterey and Los Angeles.
The nut didn’t come into its personal as a snack product till 1968, when a cooperative persuaded American Airways to purchase Blue Diamond Smokehouse Almonds to provide away as in-flight munchies.
Blue Diamond’s success quickly lured different almond considerations into the snack market and opened the door to a galaxy of modern merchandise: almond butter, almond shaving cream, almond-flavored Champagne, high-protein almond milk, almond ice cream, sweet and cookies, even almond oil appropriate for solar bathing and frying fish.
Attracted by the product that doesn’t spoil and doesn’t require a lot handbook labor, almond growers planted 74,000 acres within the late Nineteen Seventies.
At the moment the Golden State harvests the tree nut throughout a 500-mile stretch of farmlands that made almonds the No. 1 California agricultural export in 2021 at $4.7 billion — that’s 3 times greater than within the Nineties.
This yr, with the state’s agricultural heartland struggling by way of a 3rd yr of drought, farmers are having to make robust selections about abandoning orchards of the thirsty everlasting crops that want year-round water.
The 2021 drought alone value the California agricultural sector about $1.1 billion and almost 8,750-full-time jobs, in keeping with a current evaluation led by UC Merced researchers.
On one other entrance, growers are searching for state and federal assist in establishing new, extra dependable transport methods. Proposals below dialogue embody bypassing the Port of Oakland altogether by having almonds and different agricultural merchandise moved by rail to transport firms alongside the U.S. Gulf Coast.
Final month, business leaders partnered with railroad firms to create a small experimental “pop-up” agricultural terminal within the Los Angeles-Lengthy Seaside port advanced.
“We’ve got to go the place there are boats that can transfer our merchandise,” Bettencourt stated. “So, it’s all aboard the brand new almond specific trains rolling into L.A. harbor.”
The challenges dealing with almond growers take a look at the boundaries of compassion amongst environmentalists who’ve lengthy criticized their business’s outsized position in tapping the arid area’s water provides. The business responds that the water permits it to generate greater than 100,000 jobs statewide and compete in a world market flooded with low-cost overseas crops.
The controversy is hardly new. Over the many years, because the Central Valley has grown into the most efficient agricultural area on this planet, environmentalists, growers and politicians have grappled with the problems of water and the scale of water-intensive almond, pistachio, hazelnut and walnut farms.
In line with business studies, almond orchards make up lower than 13% of the state’s complete irrigated farmlands and use solely 9% of the state’s agricultural water.
However at a time when Gov. Gavin Newsom is asking on Californians to voluntarily cut back water use by 15%, critics say, it nonetheless takes 1.1 gallons of water to develop an almond, and to develop a pound of almonds requires about 1,900 gallons of water.
“California’s local weather is irrevocably altering amid the worst drought in recorded historical past,” stated Jessica Gable, a spokeswoman for the nonprofit group Meals and Water Watch. “We’re risking excessive water shortage until we transition to rising crops far much less water intensive than almonds.”
David Phippen wouldn’t go that far.
In any case, world demand for almonds stays robust, particularly at decrease costs. So, he’d choose to attend and see how the 2022 crop shakes out over the following a number of months.
“Name me optimistic,” he stated, “however issues really appear to be getting just a little higher.”