As he prepares for the start of next month's California almond harvest, McKittrick-area grower Don Davis is mindful of forecasts it may be the largest haul in state history. And he's none too happy about it.

"I think we're going to have a good, big harvest," he said. "I just don't expect to make money."

It's simple supply and demand: More almonds generally means lower prices, which is great for consumers but not so good for Kern ag.

An official projection released earlier this month by the National Agricultural Statistics Service is that California growers will produce 3 billion pounds of almonds this year. That would be 20 percent more than last year and the fifth consecutive year of record harvests.

Observers say production is up because acreage devoted to almonds has grown quickly, young trees are maturing and February's bloom was close to perfect.

PRICE COLLAPSE

What makes all of this a problem for Davis and other local almond growers is that depressed global demand during the pandemic, along with factors including Chinese retaliatory tariffs of 55 percent that have cut that country's consumption in half, have brought down prices farmers are paid to between $1.50 and $1.75 per pound. That's half what it was six years ago.

It's also a challenge locally because of how much money has been invested in almonds, which in 2018 were Kern's second highest-grossing crop, behind table grapes, at $1.2 billion.

The outlook isn't expected to change for at least a year. Even then, growers' best hope is that there will be some sort of adverse weather event that interferes with next year's almond bloom, thereby reducing supply and propping up prices.

Not that it's all doom and gloom. There's hope food producers will take advantage of the low prices and incorporate the nut into a wider variety of products. And if consumers get used to more almonds in their food, maybe those eating habits will last after prices eventually recover.

MARKETING OPTIMISM

The president and CEO of the Almond Board of California, Richard Waycott, projected optimism about the industry's ability to market this year's crop in ways that avoid the need for storing a large amount of nuts.

The industry has done well during past jumps in production, he said, and more people eat almonds now, across more markets, than ever before.

He said shipments domestic and abroad were strong last month. Plus, the number of planned shipments are at historic highs and up 4 percent year over year in June, he said.

California almonds also benefit from diverse applications, he said: Almond milk now uses almost a fifth of U.S. production but hardly existed 10 years ago. Per capita consumption of the nut continues to rise, he said.

"I'm very proud and excited about the very dynamics of the marketplace that almonds is in and that our role continues to improve," he said. "My outlook is very positive."

The less optimistic view is that even if marketing efforts succeed and sales jump by double digits, it still might not be enough.

‘SIGNIFICANT CARRY’

Roland Fumasi, senior analyst for RaboResearch at Rabobank, said he thinks recently low prices, combined with the industry's "tremendous" marketing efforts, will cause almond sales to jump 12.5 percent this year to 2.7 billion pounds.

But that would still leave 700 million pounds of almonds without a home, he said, and all of them would have to be stored and "carried" to the following season.

"That's a significant carry and I think next year's crop is going to be big again," he said, adding his projection is for prices to average $1.65 in the 2020-21 marketing year.

Davis, who spent Friday with his work crews keeping fields wet and clearing out his orchards, was also counting his blessings.

He's pleased that he's only had to spray pesticides on his orchards once this year. At this time last year he had done it three times already, he said, but so far ladybugs and other insect predators seem to be eating more mites and other pests than they did in 2019.

Davis also likes the idea cheaper almonds will increase consumers' long-term appetite for the nuts, which is a trend Fumasi thinks will end up working well for the industry.

But he said there's a sense the industry may have outdone itself by continuing to produce record crops.

For a moment it sounded like he was wishing growing conditions would take a turn for the worse, especially if that were to spare local orchards.

"Some of my most profitable years have been bad years," he said.

Follow John Cox on Twitter: @TheThirdGraf.

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