FRESNO, Calif., May 25, 2016 — California almond growers will maintain their competitive advantage over other almond producers in upcoming years primarily driven by climate and good soil. Factors that California growers will be faced with include scarcity of water and land which will prohibit the continued rapid growth of almond acreage and likely lead to average yield gains slowing as expansion focuses on Northern California regions. These dynamics and their impact on California’s almond production are examined in Rabobank’s Food & Agribusiness Research and Advisory note titled “California Almonds - Sales are Poised to Benefit From Price Revelation.”
A larger than anticipated crop and reduced purchases from many buyers has fueled the rapid decline in price. Some sales of almonds abroad have unraveled as buyers were reluctant to pay the higher contracted price, leaving the almonds dockside, forcing sellers to find another buyer in the specific region to avoid returning shipment costs. This unprecedented situation has seen the price for almonds fall from historical highs and reset the price for the incoming crop closer to the 10 year average Vernon Crowder, senior analyst with Rabobank and the report’s author states, “California almond growers expect a two billion pound crop this fall as is projected by the USDA – which is about twice as much as produced 10 years ago. More plentiful harvests and now lower prices will again encourage more consumption of almonds,” added Crowder. Actual demand for almonds is expected to continue growing globally, as well as domestically.
The report concludes by highlighting the continued increase in planted acreage. “While total almond production in California has doubled in the last 10 years, planted acreage has only increased by 47 percent. About 20 percent of the acreage planted today is non-bearing, the highest proportion since 1998,” said Crowder. With California orchards accounting for over 80 percent of global almond production, and demand expected to continue to grow, California almond growers are expected to maintain a competitive advantage among other almond producers.
This report is the first of a series of research notes that Rabobank has planned to highlight the major tree nuts grown in the U.S. Research highlighting pistachios, walnuts, hazelnuts, and pecans will be released over the next few months.