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‘Probably the toughest year we’ve had’

Water shortages, supply chain issues, inflation create challenges, almond industry leaders say.

Tim Hearden

December 9, 2022

5 Min Read
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Almond Board of California chairwoman Alexi Rodriguez, left, and President and CEO Richard Waycott make their State of the Industry presentation during the 2022 Almond Conference in Sacramento.Todd Fitchette

Water shortages, supply chain snags, inflation and war in 2022 combined to confront the almond industry with “probably the toughest year we've had as an industry,” Almond Board President and CEO Richard Waycott told an industry conference.

Adding to the woes were frost and freeze damage that devastated some orchards last winter, and a record carryover supply that kept prices lower. David Magana, senior analyst with RaboResearch Food & Agribusiness, last season's 2.85-billion-pound crop came on top of 608 million pounds of unsold crop from the previous season. This year’s carryout could add another 930 million pounds, he has said.

The Almond Board is responding with a series of initiatives aimed at boosting demand, including media and digital advertising campaigns, sponsorship of events such as Italy’s Music Festival San Marino and efforts to educate consumers about almonds’ nutritional and environmental benefits, Waycott said on Dec. 6 at the Almond Conference in Sacramento.

Related: U.S. almond crop expected to be down 11%

“We know these are challenging times,” said Alexi Rodriguez of Caruthers, Calif.-based Campos Brothers Farms, the board’s chairwoman. “This industry has been through challenging times before. With challenges come opportunities for growth and innovation.”

The remarks by Waycott, Rodriguez and other industry leaders came during the annual State of the Industry presentation, which highlighted the first day of the Dec. 6-8 conference. Having started in 1973 as a half-day seminar, the conference celebrated its 50th anniversary in 2022 with about 3,500 attendees, according to organizers.

The conference at the SAFE Credit Union Convention Center also featured a trade show as well as targeted workshops and luncheon speakers. With the many challenges facing the industry, the gathering sought to offer growers and handlers advice on how to maximize their resources and investments with options for almost every part of their operations, organizers said. Workshops centered on trade and marketing, policy, water, sustainable cultivation practices, and other topics.

Acreage, yields down

The event came after a Nov. 30 LandIQ report for the Almond Board found that California’s almond acreage decreased for the first time in more than 25 years. Total standing acreage as of Aug. 31 was estimated at 1.64 million acres, compared with 1.66 million acres at the same time in 2021, the report stated.

Bearing acres – orchards producing almonds and planted in 2019 or earlier – increased slightly to 1.34 million from 1.31 million last season. But non-bearing acres – new plantings going back to 2020 but not yet bearing almonds – dropped to 294,000 acres from 353,000 acres in 2021.

Among the orchards that did produce a crop, yields in 2022 were down. Industry representatives expected to harvest about 2.6 billion pounds this season, down 11% from the more than 3 billion pounds produced in 2021. The freeze in February was the main culprit behind the lower yields, but drought conditions and lack of irrigation water for other areas compounded the losses.

Related: Smaller U.S. almond crop projected amid larger stocks

While a burgeoning middle class with expanding food tastes in places like China kept almond prices hot for nearly a decade, prices have remained under $2 a pound for the third consecutive year as port congestion interfered with shipments.

That congestion is easing up; a container that cost $20,000 18 months ago now costs about $3,000, Magana said at the conference. But a global recession is expected to put a crimp on demand for the next couple of years, until the global middle class starts increasing again in around 2025, he said.

“By 2030, 5 billion people are expected to be in the middle class,” which will grow demand, Magana said. “In the long term, the global middle class will continue to demand food.”

While 2021’s State of the Industry address was patterned as a mock version of ESPN’s “Sportscenter,” this season’s session was a more straight-forward analysis of the current difficult time and the efforts on many fronts to help bring a return to a more normal economic environment.

Board initiatives

The board has undertaken various initiatives in the past year to boost demand, according to Waycott:

  • More than 400 spots during the NCAA basketball tournament in March featured Al the Almond – a man dressed in an almond suit -- and the board boosted its social media presence in conjunction with March Madness.

  • The board conducted a two-month marketing campaign in conjunction with the July 8 theatrical release of the latest Marvel Comics entry, “Thor: Love and Thunder,” featuring Al the Almond in culturally targeted spots in the U.S., India, Italy, Mexico and the United Kingdom.

  • The ABC ran advertising at the Music Festival San Marino in Italy with the theme, “Keep your rhythm with almonds.”

  • The board boosted its digital media presence in China and partnered with 15 brands in the Asian nation.

  • The ABC is in its fourth year of advertising on the Twitch gaming platform, emphasizing almonds’ energy boost.

  • Nutrition research commissioned by the board was picked up by media, including a recently published study that found almond consumption may benefit some gut microbiota functionality.

  • The board continued to tout its efforts to reduce water usage and food waste, including studying the use of almond hulls as a human food ingredient as well as an alternative in animal feed.

The panel is at the midpoint of implementing its Almond Orchard 2025 Goals, which are to cut water use by an additional 20 percent, increase use of environmentally friendly pest management tools by 25 percent, eliminate orchard waste by making better use of byproducts and halve the amount of dust kicked up during harvest. The goals were introduced at the 2018 conference.

Related: Almond Board CEO to leave after '23; search begins

“We’ve made great progress toward achieving them,” Waycott said. “We understand that grower conditions from Redding to Bakersfield may be different, but the idea is that the industry as a whole will achieve these goals and maximize industry efficiency.”

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