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Double-digit almond production…and rising pricesDouble-digit almond production…and rising prices

“The outlook for next year’s crop is that it will be sold at a higher starting price than the previous year’s crop, which was a record.”

Robyn Rominger

May 16, 2018

4 Min Read
Blue Diamond Growers President and CEO Mark Jansen says things are bright for the almond industry. He spoke at a field day at Arbuckle, Calif.Robyn Rominger

California’s almond industry is expected to produce a record crop of 2.30 billion pounds, according to the U.S. Department of Agriculture National Agricultural Statistics Service, which released its forecast mid-May.

That is 1.3 percent above last year’s production of 2.27 billion pounds. Bearing almond acreage for 2018 is forecast at 1,070,000 acres, with a yield of 2,150 lbs. per acre, down 5.3 percent from the 2017 yield of 2,270 lbs. The subjective production forecast is based on a telephone survey conducted April 18 to May 4 from a sample of almond growers.

A record crop and rising prices are good news for almond growers, says Mark Jansen, president and chief executive officer of Blue Diamond Growers, the Sacramento-based almond handler/processor, who presented his market analysis to farmers, agribusiness officials, agricultural researchers, and others attending the Nickels Soil Lab annual field day, which is sponsored by the University of California Cooperative Extension.

“The outlook for next year’s crop is that it will be sold at a higher starting price than the previous year’s crop, which was a record,” he says. “So, we’re getting record crops with rising prices on trend — which is a very positive thing.

“This was the second year in a row that we’ve had the worst bloom weather for almonds. After freezing temperatures, not only in the north but as far south as Merced, by the books we absolutely shouldn’t have had a crop to sell. But it looks like we’re going to have a record crop on trees across the state.”

Worldwide, almond demand continues to grow at a rate that exceeds the growth in supply, Jansen says. “We’ve had double-digit growth in consumption in the last five months. So, shipments around the world have grown double-digit, and we’ve got five months left.

“If the remaining months of the year are flat to a year ago, we’re looking at a carryout inventory of 320 million lbs. We’ve been bouncing around 400 million lbs. of carryout the last several years. Probably more importantly, the crop demand keeps going up, so that 320 million lbs. amounts to about 6.7 weeks of supply for our industry. I think eight weeks of supply is as low as we can go without having significant shortages in certain varieties of almonds.”

In addition, Jansen says, “The previous year’s crop had significant insect damage,” largely due to navel orangeworm pressure that has been increasing statewide. Pest damage lowers the quality of almonds. “Because of that, I think that for higher-quality almonds we’re going to see this year’s crop continue to rise in pricing because there are going to be shortages. That’s obviously a good thing.”

With a minimal amount of product remaining from the 2017 crop, firm pricing can be expected as booking for the 2018 crop gets under way. “I think prices are at a very positive level,” Jansen says. “On a historical basis, we would say these are very healthy prices, but we’re having the right type of price increase — it’s gradual. It’s the type of price that the market can absorb. And almonds are still a value relative to other tree-nuts. That’s important for markets like India and China, where they will substitute hazelnuts and cashews, if those products are cheaper. Because of that, right now I feel very good where the outlook is for almonds.”

As for future California almond production, “We’re absolutely going to have a 3 billion-pound almond crop, likely within the next five years,” Jansen predicts.

Blue Diamond Growers is the world’s largest almond processor and sells its products worldwide, from whole nuts to value-added products. Recent innovations include its Almond Breeze dairy-free yogurt that is being marketed in Spain.

In terms of domestic sales, the company’s sales/growth strategy has included sponsorship of professional athletic teams such as the Sacramento Kings, its hometown basketball team. In 2016, the cooperative signed a three-year partnership with the National Basketball Association franchise. Kings fans now see Blue Diamond advertising in the Golden One Arena, including logos on Kings jerseys to promote the grower cooperative’s products.

About 125 people attended the Nickels Soil Lab field day. The research site is managed by the UCCE office in Colusa County.

“The Nickels annual field day is one way the Nickels Trust and UC extend the research results from work at the Nickels Soil Lab and provide general grower education,” says Franz Niederholzer, UCCE farm advisor in Colusa, Sutter, and Yuba counties. “It’s also a way for growers and pest control advisors to directly interact with researchers in a relaxed atmosphere. It’s literally a research meeting in the field — familiar ground for growers. The program also includes industry updates and perspectives; equipment demonstrations; and an annual fundraiser for the Pierce High School FFA Chapter in Arbuckle.”

“I really enjoyed Mark Jansen’s presentation,” Niederholzer says, “and I appreciated the perspective of a major player — Blue Diamond — on the current and future situation for California almonds. Growers need to have access to this kind of information and perspective as food-for-thought when making long-term decisions. Almond orchards last for at least 20 years, so local, state, and international trends and perspectives are critical to the planning process.”

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