The downturn in profitability for almond growers in California, described as a "perfect storm," may be seeing a change, with indicators suggesting a recovery could be on the horizon. Rabobank's RaboResearch Food & Agribusiness division has projected a favorable outlook not only for almond growers but also for pistachio and walnut producers, despite the walnut sector facing challenges due to intense global competition, particularly from China and Chile.
Financial difficulties for California's almond farmers began in 2020, triggered by the global economic impact of the COVID pandemic. This was compounded by a record almond harvest of over three billion pounds, leading to an oversupply in the market. The subsequent seasons saw the industry grappling with a significant carryover of unsold stock, ranging between 600 million to over 800 million pounds, alongside new crops that also reached into the billions.
The unexpected size of the 2020 almond crop, which surpassed USDA estimates due to an undercount of bearing acres, contributed to the glut. However, the industry is showing signs of emerging from these challenges, with a potential easing of economic pressures such as inflation and the strong U.S. dollar anticipated.
Recent data from the Almond Board of California highlights a recovery in global demand for U.S. almonds, with shipments in May increasing by over 15% compared to the previous year, and a year-to-date increase of over 5%. Over 2.3 billion pounds of almonds have been shipped globally in the current marketing year, out of 3.1 billion pounds of marketable almonds.
As a result, growers are seeing a stabilization in prices. Prices for specific almond varieties have seen increases, with Butte/Padre nuts rising by about 40 cents per pound, and Inshell and standard Nonpareil almonds reaching around $2 per pound. This price improvement is attributed to a reduction in the supply of almonds remaining before the next harvest, with expectations for the unsold volume to drop below 500 million pounds, marking a decrease in the unsold carryout noted over the past three years.
According to a field representative, the remaining unsold almonds are not of the highest quality, which has contributed to the firming of prices for the remaining crop.
Source: farmprogress.com