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WFP_Todd_Fitchette_Almonds-170.jpg Todd Fitchette
A perfect storm of events is perhaps more to blame for the almond price crash than are accusations of poor leadership within the industry.

Industry 'fragmentation' did not cause almond price crash

Blaming industry 'fragmentation' on almond price crash misses the mark

Should the U.S. pistachio and almond industries consolidate their efforts to shore up grower prices? Based on the words of one large processor that answer is "yes."

Wonderful Company owner Stewart Resnick did not use those exact words, but reasonable estimates suggest as much. Instead, he chose the word "fragmentation" to illustrate why U.S. almond prices are so low and why he wants to prevent that from happening to the pistachio industry.

Given Resnick's ability to channel lightning, I was surprised to discover people I contacted among the almond industry had not heard of his video or comments. Not surprising was the decision by those to whom the accusations were leveled to remain quiet or share their thoughts with me on condition of anonymity. Resnick likewise chose not to elaborate on his accusations.

It is not difficult to surmise to whom his accusations were aimed. The large almond marketing order with its board of directors and close-knit relationships was likely in those crosshairs. They may not be alone in this criticism. Pistachio industry leaders likewise felt compelled to remain publicly silent.

Some will remember Resnick for successfully ending the California Pistachio Commission about 13 years ago. Because of the size of Resnick's company at the time, relative to the rest of the pistachio industry, his single vote during a regular referendum carried more weight than all those in favor of continuing the 26-year-old marketing, research, and promotion organization. One might argue this led to more, not less, fragmentation in the pistachio industry.

Perhaps Resnick means there are too many nut processors out there and that a cartel could be more efficient. Given the ability of U.S. farmers to overproduce profitable crops, this is plausible.

Credit Resnick for his marketing savvy and willingness to buy cleverly produced television ads and air them during the Superbowl for boosting consumer awareness of the tasty snack nut.

One producer I spoke with said there may be a certain amount of validity to Resnick's claims of fragmentation as he shared the story of five almond farmers in a pickup and how two of them received back-to-back calls from the same potential buyer trying to nickel-and-dime each of them on price. If nothing else, the anecdote suggests individual growers may want to rely on trusted and experienced marketers to sell their crop at the highest possible price rather than going it alone.

The U.S. almond industry's price woes should not be a surprise given what the Almond Board tells us every year at the almond conference about unfettered plantings and the popularity the crop enjoys among investors. Such is a recipe ripe for disaster should the Almond Board fail to improve demand or the world fall into recession.

The predictable downturn was bound to happen and no amount of consolidation within the almond industry could reverse the impacts of overplanting and a global pandemic.

TAGS: Marketing USDA
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