There are few certainties in farming — but California almond growers are on a definite fast track to produce 1.5 billion pounds of almonds annually in the very near future.
As Richard Waycott, president of the Almond Board of California, was driving from the board's offices at Modesto to Arbuckle for the 30th annual Nickels Almond Field Day, he visualized the certainty of that future.
“My Lord, what a big crop we've got coming on (in 2007),” says the CEO of the marketing and promotion arm of the California industry.
He told the 200 growers and others at the field day that the almond board has been sharply focused for several years on marketing those projected huge future crops.
Experts are predicting almonds could take a quantum leap toward 1.5 billion pounds annually, with a 2007 crop possibly as large as 1.3 billion pounds.
Waycott notes that bearing acreage is now at 616,000, a 30,000-acre leap from last season, en route to 730,000 to 740,000 acres within the next four to five years, and the 1.5 billion pound crops that have been long anticipated.
The almond board staff of 35 employees and its $37 million budget (funded by an annual assessment of 3 cents per pound) are facing the marketing challenge head-on, with research on how to continue expanding consumption. It is now centered on markets in North America (U.S. and Canada) and 27 European Union countries. Together, these two mega-markets account for 80 percent of California's annual almond sales.
In analyzing the smartest place to spend promotional money to achieve the most rapid growth in consumption, research came up with Poland, a country growing in population and economic growth. “It's one of the key countries for European expansion,” says Waycott, who will soon go to there to strategize how best to market California almonds.
There is continued focus on markets in Japan, Korea, Taiwan, and China, to “determine who influences whom across that region.”
There is also focus on India, now the fourth largest export market for California almonds. Both India and China will be “mega markets for almonds in the future.”
The rapid growth in almond production in California has come through rapid expansion of markets, largely due to the promotional efforts of the almond board. For the past several years, demand has outstripped supply, and grower prices have been nothing short of phenomenal.
This hasn't been lost on other countries, but Waycott, in assessing possible world competitors, indicated that there don't seem to be major competitors on the horizon.
With any major American ag product, China is the first place everyone looks to see if they are poised to cash in on a good thing.
Last summer, almond board representatives visited all possible almond-growing regions of China and, Waycott says, “at least for now, there doesn't look like there is much opportunity for them to produce almonds.
“It appears that climatic difficulties of growing almonds are insurmountable until new varieties are developed, but we will keep an eye on that area.”The same goes for Turkey.
There are too many other ag interests and urban problems to expect much of an expansion of almond production in Europe.
Australia is about the only country where there can be significant expansion. They currently produce 30 million pounds, expanding to 100-million pounds. But, there are water availability challenges in meeting that production level.
The 1.5-billion pound U.S. almond crop projected by 2010 will make almonds a $5 billion per year ag commodity and a very important commodity for the U.S.
“Almond exports are the largest U.S. agricultural export to India, France, Spain, the UK, and Germany,” notes Waycott. “We're No. 2 to Latin American countries. We're no longer ‘the little almond farmers in California.’”
The California industry is 6,000 growers strong and belongs “at the table” where the future of American agriculture is determined,” he says. “We need to be better organized to make sure the almond industry's voice is heard on regulatory and foreign trade issues.”
When the industry was small and struggling, it wasn't involved, “but now we need to be involved as never before at Sacramento and Washington.”
Although there seems to be little competition standing in the way of marketing 1.5-billion-pound crops of the future, food safety is an issue that could derail the juggernaut.
Waycott says the industry is “much too vulnerable” to salmonella and aflatoxin outbreaks. A pasteurization program, scheduled to begin this fall with the '07 crop, will go a long way in dealing with the threat of a food-borne illness issue.
The board is also working to win approval for certified food safety inspections to be conducted in California before the almonds are exported, rather than the inspections taking place at the destination point.
Waycott admits there are increasing rejections for aflatoxin at European destinations and containers returned to the U.S. for more processing.
The almond board does not set price of directly marketing the nuts, buy Waycott pledged it will “do everything to keep demand up where it needs to be to meet the supply” and keep almond growers profitable.