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Industry poised to market 1.5 billion-pound crop

A 45 percent increase in the supply of a commodity from the largest crop ever recorded over a short, four-year time span would be cause for concern for most California commodities.

However, almonds are not like any other California commodity. California almond growers have gathered record and near-record crops the past five years coupled with receiving record and near-record prices.

With 100,000 acres of non-bearing orchards to add to the current inventory of 580,000 acres that basically produced the five-year of records, the industry is expected to reach 1.5 billon pounds of production in just four years.

However, according to a report from the USDA NASS California field office given at the recent 25th annual Agribusiness Management Conference in Fresno there is a “wide array of positive and democratic indicators” that provide assurance that California growers will profitably market the 1.5 billion crop with relative ease.

Prices may not maintain their stratospheric levels of the past 5 years--$2 per pound or more, but according to the NASS there seems to be little cause to predict the sky will fall when the crop reaches 1.5 million. This is no more likely to happen than it did when the crop reached 1 billion pounds for the first time in 2002. Many predicted a market collapse then. Prices went up instead.

Positive factors supporting continued financial success for almond growers include:

--Rising prosperity in emerging markets like China and India.

--Increasing health consciousness among today’s global consumers. --The ever-growing body of published scientific research on almond health and nutritional benefits will continue to provide an “especially powerful incentive” for consumers to regularly incorporate almonds into their daily diet.

--Domestic average U.S. consumption is skyrocketing. It has gone from 0.77 pounds in 2000 to 1.02 pounds in 2005, a period of record high prices for almonds. This is not expected to reverse itself.

Almond Board of California consumer research found “strong upward movement for almonds in almost every measure of awareness, attitudes, and usage.”

This reflects the success of the industry-funded generic public relations and advertising programs in improving perceptions and increasing reported purchases of almonds in the U.S.

California produces 100 percent of the U.S. crop of almonds and 80 percent of the world supply. The crop represents a value of about $2.5 billion annually.

One-third of the California crop is sold domestically. The other two-thirds is sold to 90 markets worldwide. In the past five years, almond exports have increased 11 percent. Almonds are the largest specialty crop export in the U.S. Almonds are the largest agricultural export from California with a value of $1.6 billion, more than the combined value of wine, table grapes, raisins and grape juice.

The top five export markets are Spain, Germany, Japan, Italy and France, which combined accounted for 50 percent of total export shipments.

According to USDA, signs are favorable for expanded almond consumption in Indian, China, Mexico and Russia, all emerging new markets for California almonds

However, similar opportunities for growth are evident in established almond markets like Canada, Western Europe and Japan.

The California almond industry is on track to achieve the title “healthiest specialty crop in the world” and that bodes well for the 1.5 million pound harvest expected in 2010.


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