Nelson has one of the more enviable tasks at the Agribusiness Management Conference in Fresno. His was to report on the status of the California tree nut industry and the outlook for pistachios, almonds and walnuts is perhaps one of the brighter ones for California crops.
Yes, that includes almonds, the crop many believe is an oversupply disaster waiting to happen.
California may or may not produce a record almond crop in this season. Early on it was projected to be a record 850 million pounds, surpassing the 1999 830-pound record. With 75 percent of the crop hulled and shelled, it looks like it may not make that level. Nelson said it could come in only at 800 million pounds, but that combined with 703-million-pound 2000 crop is considerable tonnage to move.
Nevertheless, California continues to move record tonnage. For the 2000-2001 crop year it was 740 million pounds and for the 2001-2002 season it is projected to reach 760 million pounds.
Over the past 20 yeas, Nelson said the annual almond sales growth rate has been 4.3 percent.
And consumption, he said, over that same period was limited by available supply. Buyers today have a perception of adequate supplies and the positive consumption trend is expected to continue.
"Almonds are being considered more often as a food ingredient in cereals, candies, ice cream and other items," Nelson said. "Low prices and strong supply provide incentive for companies to promote almond enhanced products."
Even with back-to-back large crops, Nelson said current prices back to farmers are in the 85- to 95-cent range.
No, that is not anywhere near the $2 price of years past, but today’s higher producing, more dense orchards produce more almonds per acre. The average number of trees per acre has increased from 88 in 1990 to 101 in 2001.
Older orchards cannot keep pace with the new ones. Nelson said there are 180,000 acres of almond orchards — 30 percent of the state’s total almond acreage — more than 20 year old. Those trees will soon come out, he predicted. California’s producing acreage is 525,000 acres. Non-bearing is estimated at 75,000 to 80,000.
Future expansion will be limited to those who have "financial staying power."
There is a 1 billion-pound almond crop on the horizon, but it will not likely be next year coming off a big 2001 crop.
"A crop of 750 million pounds could see farm prices return to $1.25 to $1.35 per pound," he predicted.
California’s other traditional nut crop, walnuts, also is enjoying steady consumption growth at an average of 3.4 percent annually over the past few years.
California’s acreage is holding steady at 191,000 bearing acres with crops of 239,000 tons last year and a projected crop of 280,000 tons this season. Shipments of California walnuts last season totaled 250,000 tons, 105 percent of production.
Two-thirds of the California crop is exported and one third is consumed domestically. It is a primarily a food ingredient item, but the snack food portion of the market is growing faster behind a message of health and nutrition.
The quality of this year’s crop is excellent, reports Nelson. Growers received 60 to 62 cents per pound in-shell for last year’s crop. This year’s return is expected to be slightly less.
Nelson said both the short and long-term outlook for walnuts is positive.
California’s pistachio acreage is 74,578 bearing and 21,730 non-bearing.
Iran and the U.S. produce 70 percent of the world’s pistachio supplies. Fifty percent of Iran’s pistachio plantings are non-bearing and production in that country is expected to increase 40 to 50 percent over the next five to seven years.
California’s 2001 crop is now projected at 160-170 million pounds, well off the state’s earlier estimate of 200 million pounds.
Current year shipments should reach 171 million pounds — a new industry record.
Prices have firmed recently at $1.55 for raw 21/25 U.S. extra No. 1 product. That price is expected to go up as much as 10 cents during this fall.
"Buying interest has been strong in domestic and export markets," said Nelson.
Industry experts expect a sharp worldwide increase in production over the next five years, but they expect consumption to keep pace.