Oversupply dampens upcoming almond bloom
Kern County farmers tend to be optimists by nature, but it’s hard to know what a good outcome would even look like this year as the almond bloom approaches.
Such an oversupply has piled up that almond prices actually declined last month when a parade of storms made clear California’s drought would at least ease, raising expectations for greater production at a time local growers are already losing money.
No one’s calling for bad weather that could interrupt the upcoming pollination, or a deep cold that could freeze fertilized buds before they can form into nutlets, as happened last year, significantly limiting Northern California’s almond harvest.
That said, under the circumstances, “we’re not looking for a super bumper crop,” said Richard Waycott, president and CEO of the Almond Board of California.
The uncertainty during what is otherwise a time of hope has put an uncharacteristic cloud of apprehension over Kern’s single-largest crop by total farmland.
People in the business wonder exactly how much acreage has been taken out of production recently and exactly how much inventory remains in storage, local farmland appraiser and broker Michael G. “Mike” Ming said. Official estimates won’t be available for months.
Some large local growers he talks with have removed extensive orchards, replacing them in some cases with a different mix of crops.
“And they’re only going to plant back 50 percent of it,” Ming said, adding that in some cases the land may go to row crops with greater
We’re not looking for a super bumper crop.” — Richard Waycott, president and CEO of the Almond Board of California
irrigation flexibility or be left fallow to save water.
An industry report estimated 20,000 acres of almond orchards were uprooted in Kern last year, which based on official totals from 2021, could amount to almost 9 percent of the county’s productive almond acreage — a significant chunk that could help moderate the size of this year’s crop.
But like much of the outlook facing local almond growers, even a decline of that degree is complicated.
Statewide, last year saw the first decline in decades in the nut’s overall acreage, with fresh plantings alone down 17 percent year over year, according to a report by the almond board and Sacramento-based Land IQ.
Still, the amount of farmland actively producing nuts ended up growing 2 percent in 2022, by 30,000 acres, according to the report.
Recent uprootings won’t affect what’s known as the carryout inventory that didn’t get sold last year, when the total number of pounds of almonds in storage hit a record high. The carryout will undoubtedly weigh on prices this year as supply outpaces demand.
Ming said nut brokers tell him the carryout this year is “going to be a very substantial number. And so, we’ve got to go through that to get everything cleared up, to get our back supply taken care of so we can move forward.”
“And if we have a big year,” he continued, “it just adds to that.”
Figures from the Almond Board of California show demand, as measured by domestic sales from August to December, was down 9 percent year over year, while export sales were off 2 percent. Although it’s understood export activity has been badly constrained by logistics trouble, Waycott said it’s less clear — and the board aims to find out — why domestic manufacturers are buying less almond paste and almond flour.
Prices in recent weeks have been changing according to the weather and the water situation, David Magaña, senior analyst and vice president at RaboResearch Food & Agribusiness, said by email.
He shared a report more almonds were put on the market in mid-January after storms dashed hopes that prices would recover if the drought wore on. So much supply coming on at once led prices to decline, Magaña wrote.
More recently, questions about weather and the potential for a damaging freeze are “slightly supporting prices,” he said. Some forecasters see normal conditions returning soon, Magaña noted, adding, “weather will remain the usual wild card.”
Waycott said growers’ lower sights mean it’s possible fewer bee colonies will be deployed in California orchards this year, and less money may be invested in crop protection.
Overall, the board is hoping for “sort of an average crop” this year, Waycott said, adding that good news on the horizon includes expectations interest rates will settle down along with inflation.
Ming noted a recent uptick in the amount of almond orchard property being listed for sale. That puts downward pressure on farmland prices, he said.
He pointed out that, on one hand, the state’s water reservoirs are beginning to fill, which could ease one of the bigger challenges facing almond growers in recent years. In that sense, conditions lately are a combination of “positives and negatives,” Ming said.
On the other hand, unless inclement weather sets in, this year’s bloom is setting up to be really good this year, he said, “which we don’t necessarily need in this oversupply situation.”