The California almond industry may be in for anxious days and restless nights during the next five or six years, depending on how new plantings interact with almond prices and world events, says an almond sales and marketing executive.
Dan Whisenhunt, Monte Vista Farming Co., Denair, said he expects the current crop to be less than the 1.02 billion pounds of 2003 because of poor bee activity during bloom this spring.
He pointed to the all-important “bee hours,” vital for pollination of the almond crop and defined as conditions of daylight warmer than 55 degrees, with winds less than 15 miles per hour and no rain. The total for the state was 92 bee hours this year, trailing well behind the 158 of 2003 and the 200 of 2002.
Whisenhunt was one of four panelists taking the pulses of the almond, walnut, and pistachio industries for the 2004 Spring Ag Forum of the California Chapter of the American Society of Farm Managers and Rural Appraisers in Visalia. He said he'd heard estimates around the trade of new almond plantings ranging from 70,000 to 100,000 acres for this year.
He noted bearing acreage in 2002 and 2003 was 530,000, but a 2004 acreage figure at the time was pending release of the California Agricultural Statistics Service subjective almond crop estimate.
Referring to prices rising above $2 per pound (select Nonpareil sheller-run spot pricing), he warned that as prices ascend, resistance to demand is emerging in China, India, Eastern Europe, and other economies that cannot support higher prices. If supplies continue to rise, present price levels there could be difficult to maintain.
And that's not the only thing to watch, he added. Bloom in subsequent seasons will govern supplies, which influence prices. A stronger U.S. dollar would imperil exports to Europe. The staying power of the favorable publicity from health benefits of almonds will play a role in demand.
Also at issue are unknown political fall-out from the Middle East and potential additional environmental regulations for dust and smoke abatement adding to growers' costs.
“And,” Whisenhunt asked, “what about the effects of new acreage in four or five years when it comes into production. Will prices cycle down in 2010 like they did in the late 1990s?”
John Slaughter, field representative of Burchell Nursery at Fowler, offered a nurseryman's take on potential new acreage of almonds for 2004, 2005, and 2006. He said tree demand was not fulfilled this year and probably will not be met for 2005, although it may be oversupplied in 2006.
His estimates were for 45,000 to 60,000 acres going into the ground this year, 72,000 to 90,000 in 2005, and 81,000 in 2006. Those include trees from licensed, established nurseries, plus other “Tom, Dick and Harry” sources and farmer-grown supplies.
Slaughter, a veteran almond and peach breeder and industry guru, said potential over-planting is only part of the danger facing the industry.
Strength of the dollar, losses from shaker damage, shortages of water, availability of quality bees, threat of the tenlined June beetle, tree longevity, competition from China: all will have to be addressed by almond growers.
Pistachio production in 2004, an “on” year, said Jim Zion, managing director of Meridian Nut Growers Alliance, Fresno, could approach 325 million pounds, in the wake of the scant 116 million pounds of the 2003 “off” season.
Although the industry's bearing acreage was 88,000 in 2003, reflecting a steady climb in production, the gap between “on” and “off” years has become more pronounced, as seen in 2003-2004.
Average grower returns for 2003 were $1.20 to $1.25 per pound, falling in the range from 92 cents in 1994 to the high of $1.33 in 1999.
Zion said among the advantages of the California pistachio industry, concentrated in Kern County, are its high reputation for food quality, a strong health message to consumers, and a limited ability to increase acreage rapidly. Another plus is interest in pistachios as ingredients in confections and baked goods.
On the other hand, the industry claims only a fraction of the world output, its crop estimates are inaccurate, it has few resources for marketing, and it has few processors (eight processors vs. 150 for almonds) facing consolidating retailers.
“Export markets will become increasingly important, and I expect within five or six years we'll see 70 percent to 80 percent of our product going overseas,” he said.
Zion predicted Iranian pistachios would eventually be allowed back into U.S. markets. However, in the meantime, the newly created federal marketing order for California pistachios will set grades and standards and aflatoxin testing practices for imports.
This, he added, will prevent a large portion of Iranian product, which has traditional problems in meeting food safety standards, from entering the U.S.
In giving his impressions of the California walnut industry, panelist John Colbert, president of Greenleaf Farms, said it needs growth by 8 percent in each of the next four to five years to maintain prices.
If that growth is not realized, the Kingsburg grower said, older, marginally producing trees will come out.
According to his survey of cooperatives, average prices for walnuts for 2004 are expected to be down about 3 cents per pound from 2003.
Chandler acreage, Colbert noted, has been on the upswing since 1994 and in 2002 accounted for some 50,000 acres of the state's 200,000 bearing acres. “We love them, they pay the most, and are the cheapest to grow, but they come late in the season.”
Among other varieties, Serr produces erratically, and Hartley, despite being the most desired in-shell variety, suffers from comparatively poor returns.
Another speaker at the forum was Scott Horsfall, chief operations officer of the California Grown advertising and promotion campaign created in 2001 for 30 of the state's fruits, vegetables, and other ag products, including fish, forestry, and sheep.
The program, bankrolled with $28 million from federal, state, and industry sources, seeks to boost California farm products for the benefit of the entire state.
“A 10 percent increase in consumers choosing California grown products dramatically impacts the state's economy and job outlook, and it could mean $1.38 billion in additional spending due to increase activity and more than 5,500 new jobs,” he said.