California almond growers and marketers are fretting like expectant fathers in a maternity ward waiting room.
The state's 2004 almond crop is in its seven-week birth cycle and everyone is hoping for another big bubba — the third consecutive 1 billion pound crop to meet continually growing world demand.
The prospect of a crop that large once sent waves of fear through the industry not many years back. It is now needed from the state's 500,000 acres in production.
California produces 75 percent of the world's almonds, therefore, it controls it own market destiny.
And, providence has been magical for the state's almond growers with two straight huge crops coupled with consistent, double digit monthly sales increases and remarkably good prices that likely will be of recording setting proportions for the third straight year, assuming a normal 1 billion pound 2004 crop. If spring weather problems significantly reduce the crop, almonds could start looking like gold nuggets.
For the first six months of the marketing season, more than 577 million pounds have been shipped to markets worldwide from a season-beginning inventory of 1.136 billion pounds, including 162-million pounds of carry-in. Most believe shipments will total 980-million pounds for the 2003-2004 marketing seasons. That means handlers must move 402 million pounds in the next six months. Already they report 237 million pounds are committed; 908-millions is a slam dunk.
“There is no need to get nervous about a billion-pound crop any more if we can sell a billion pounds of almonds in a year,” said Rick Kindle, vice president of operations and marketing for Gold Hills Nut Co. in Ballico, Calif.
Most of crop exported
Seventy-five to 80 percent of California almonds are exported and the weakening dollar has bolstered those sales. “Buyers in Europe and Japan are not feeling the pinch of higher prices to California growers because of the weakening dollar,” said Kindle. Export demand continues strong, he said.
The demand for almonds is being driven by the latest health news that almonds reduce cholesterol.
“The strong nutritional value of almonds is becoming very faddish and the news that almonds reduce cholesterol is really getting out worldwide,” said Kindle.
Spot grower prices now for 2003 crop almonds are $1.85 per pound for Nonpareil and about $1.60 for California types. However, those do not reflect what final average should be since sales are averaged over the year. Experts say final prices should be between $1.50 and $1.60 for Nonpareil and $1.40 to $1.50 for California types.
These prices are based on a normal 2004 bloom and crop set. Just in case, handlers are holding back about 25 percent of the 2003 crop to make sure they have almonds to sell if weather disrupts the crop. A poor '04 set could send those reserves skyrocketing in price.
Weather plays a big role in all crops, but few California crops are subject to the vagaries of the weather in such a short period of time as almonds. Weather plays a major role in getting the crop pollinated the crop and whether diseases affect that set early.
No one knows that better than Kerman, Calif., almond Don Hornor, who grows almonds in 440 acres of orchards. The oldest is 12th leaf; youngest third leaf.
Early spring critical
The first six to seven weeks of spring when trees blossom, the weather can make a huge difference in what a grower harvests in late summer and early fall, said Hornor.
Honeybees need clear, mild weather to work the blossoms and set the crop. “Without them there is no crop, and every almond grower knows that,” said Hornor. Protecting those blossoms and young leaves from early diseases is just as important
Fortunately Honor's 2.5 hives per acre are in place because he can count on his neighbor, commercial beekeeper Bob Felker.
Nevertheless, some almond producers invariably wait to the last minute, Felker said waiting for cheaper bee price. Those waiting this year likely paid higher prices for questionable strength colonies, said Felker.
“I had a lot of calls in late January looking for bees, but not many as we got closer to bloom,” he said.
Growers with long term contracts for bees pay about $50 per colony. There have been reports of beekeepers asking $100. However, Felker said he has also heard bees offered for $43. “You begin to wonder just how serious is the shortage,” he said.
Hornor wants and gets from Felker a minimum of eight frames per box of active bees.
Felker acknowledges there is a bee shortage for almond production caused by many factors; the wildfires in Southern California wiped out 30,000 colonies; varroa mites destroying colonies; infestations of red imported fire ants keeping colonies from other states out of California; increasingly more almond acreage need bees and high wholesale honey prices.
Mites take toll
“I lost 1,500 colonies to mites last year. Mites seem to run in cycles. When the colonies become real strong, they seem to implode from mites,” said Felker.
Honey prices have remained high for the past two almond pollinating seasons, and Felker said out-of-state beekeepers make as much staying home and making honey as they would trucking bees into California for crop pollination.
“With honey prices now at $1.30 per pound, I don't blame them for not trucking bees to California from Texas and other states,” said Felker.
Even though California produced 1 billion pounds of almonds last season, average yields were down in many individual orchards.
“My yields were down 20 percent last season from 2002,” said Hornor.
Therefore, trees this season have a lot of starting energy.
“There are a lot of buds out there this year and growers needed strong colonies to pollinate the crop,” said Felker.
Hornor and University of California Cooperative Extension Farm Advisor Mark Freeman concur.
“There are a lot of buds and if there is a shortage of bees in an orchard to pollinate that could reduce the crop potential,” said Freeman, who added that almonds had received adequate winter chilling hours.
Cool weather delayed bloom a bit this year, said Freeman.
Kindle said Gold Hills growers are talking about a “flash bloom” this season with bloom coming on rapidly.
“If that happens at the right time and the weather is good, the bees will have to work like crazy to set the crop,” said Kindle. If buds all push at once and the weather is cold and wet, bees will not work and the crop could be severely impacted. Bees will not fly when the temperature is below 55 degrees.
A strong bloom was expected to start by the third weekend in February and extend for two to three weeks.
Freeman said temperatures in the low 60s to the low 70s are ideal for bloom and pollination. If the thermometer climbs into the high 70s and into the 80s during the day, the bloom could be rapid.
“We have had two pretty good bloom years in the past two seasons. The averages are against a third ideal bloom,” said Freeman.
Protecting those blooms and young leaves against disease is another critical element in holding the crop, said Hornor.
“I sprayed twice the last two seasons, and we are ready to go again this season,” he said, a University of California fungicide efficacy chart on the center console of his truck along with bid sheets from two chemical retailers.
“I use Rovral for brown rot and it works well. It can have a little bit of a carryover into preventing shothole,” he said. “My second spray was Ziram the last two years.
“I really wanted to try a new product, Pristine. It works best on both brown rot and shothole, according to the efficacy chart. However, my supplier said it was not available,” said Hornor.
Brown rot, green fruit rot or jacket rot and shothole are the three main spring diseases in almonds. Freeman said they all require rain, heavy dew or fog for spores to infect plant tissue.
When rain is forecast, Hornor gets his spray rigs ready. The more it rains, he more he is forced to treat for diseases.
The season for blossom and leaf diseases can last seven weeks under normal spring weather.
Farmers do not like to spend money unnecessarily, but with the price prospects of almonds for 2004, there is little hesitancy to protect what is almost a sure profit maker.
Strong price outlook
Kindle sees a strong grower price for the next two years, but after that uncertainty drops in.
“There has been a lot of acreage going in the last few years, and it looks like more will be planted in the near future,” said Kindle. “The strong price of almonds over the past two years will allow growers to replace old orchards with new trees.” New plantings are closer spaced and produce many more nuts per acre.
Freeman said he has heard reports that 7,000 acres of new orchards are being planted in Kern County, the largest almond producing county in the state. Fresno County's acreage has increased as well. Acreage north of Fresno to Sacramento also is increasing.
“Nurseries are sold out of trees for planting this year,” he said.
Not only are old almond orchards being replaced, but almonds are replacing unprofitable stone fruit and prune orchards and raisin and wine vineyards.
Freeman said a new almond orchard yielding 2,500 pounds per acre at maturity is profitable at much lower prices than those being paid growers today. It costs about $1,800 per acre to produce almonds, excluding land costs and taxes.
“A healthy orchard producing 2,500 pounds per acre is profitable at $1.10 to $1 per pound,” said Freeman.
Big blocks concern
That reality is not lost on Hornor, who is also a grape grower. “Our almonds have been carrying our vines for the past three years,” he said. It is tempting to plant more, but reports of large blocks of almonds going in tempers his thoughts.
“It is not the 40- or 160-acre blocks that concern me. It is the 1,000-acre blocks that we hear about on the West Side,” he said.
The area around Kerman is a mix of vines, trees and open land.
“I know some people with debt-free say almond prices of only 65-cents per pound are a better deal that we've seen on grapes with green prices of $65 and $70 per ton and $400 for raisins,” he said.
Almonds also are attractive because they require much less labor.
Hornor says, however, it is difficult to rip out a well-established vineyard and invest in new almonds which will not bring an economic return for several years.
“Most growers around here think grapes will come back this year. We hear talk of $120 to $150 per ton for green prices and $700 for 100 percent raisins,” said Hornor.