California's almond harvest is underway, with questions over whether the crop will reach the U.S. Department of Agriculture's July forecast of 3 billion pounds. The projection surprised the market and led to a nearly 20 per cent drop in almond prices, reducing the crop's value by about US$1 billion. Last year's almond crop was valued at US$5.7 billion.
Ali Amin of Primex International Trading said, "That shocked the market. Nobody expected it." Prices had climbed over the past year, but the forecast and anticipated oversupply cut margins for many growers.
Growers in Fresno, Madera, and Merced counties reported yields below average, with small kernel sizes reducing output. "It took the wind out of the growers," said Jasbir Sidhu, who estimated yields 20 per cent lower than expected. Jake Barcellos added that his yields were 15 per cent below average.
Processors, including Blue Diamond Growers, said it was too early to assess the crop. "I can't pass judgment on this crop at all right now," said Mel Machado, chief agricultural officer. California has only once produced 3 billion pounds, in 2020.
Almond prices have since risen slightly, reflecting both market skepticism of the forecast and higher shipments. Amin noted, "In the short term, sentiments can influence the market. In the long term, of course, it's supply and demand."
California's almond acreage doubled over 15 years, peaking in 2021 at 1.64 million acres (663,600 ha). More trees have since been removed than planted, though bearing acreage rose this year to 1.39 million acres (562,400 ha). High input costs and low prices have pressured growers.
Average almond prices have been US$1.77 per pound since 2020, below the estimated US$2 break-even price. In 2014, almonds sold for US$4 per pound. Fresno County farmer Joe Del Bosque said he removed a quarter of his acreage and has not replanted. "I see an awful lot of land out here with nothing on it," he said.
Trade developments continue to affect markets. India, which accounts for more than 20 percent of California almond exports, faces new U.S. tariffs of 25 percent, set to double. Julie Adams of the Almond Board said, "The feeling is that there's still a lot of room for expansion" in India.
China, once the top buyer, now sources more from Australia, while California has sought new markets in Morocco, Turkey, and the United Arab Emirates. "Fostering that diversification is extremely important," Adams said.
Growers report financial stress. Sidhu said farmers are cutting back on irrigation, labor, and other costs. "A lot of people are trying to get out," he said. "You wake up at 5 in the morning and work until 10 at night, and you can't break even."
Source: AgAlert