Almond acreage retreats in welcome trend
Dec. 4—The overabundance weighing down California almond prices is showing early signs of easing as acreage devoted to the former darling of Kern agriculture starts to scale back in favor of other crops like pistachios that offer greater irrigation flexibility during the drought.
A new report commissioned by the Almond Board of California and carried out by Sacramento-based Land IQ says the nut's total acreage declined for the first time in decades this year, albeit by a tiny fraction. Fresh plantings declined 17 percent year over year to 294,000 acres and orchard removals rose 6 percent to 60,400 as of Aug. 31.
The cutbacks belie a 2 percent, 30,000-acre increase in nut-bearing almond land statewide, and so the overall decline is not seen as leading to a quick turnaround in prices that producers say are not covering their growing costs.
Even so, the new numbers have been greeted with hope that, at a time of rising inventories and logistical challenges, supply and demand may have begun to rebalance.
"Land IQ's report may indicate a possible trend toward lower California almond acreage in the year ahead," ABC President and CEO Richard Waycott said in a news release Wednesday.
People in the industry locally say western Kern along the Interstate 5 corridor has seen the county's largest reductions in almond acreage. They say water needed to grow almonds has become prohibitively expensive, and that institutional investors are turning more toward pistachios, which take longer to mature but tolerate lower-quality irrigation water. Row crops are another popular option that don't demand a decades-long water commitment.
Kern County, by virtue of its extensive almond acreage, figures prominently in this year's retreat.
Land IQ reported Kern ranked second in total almond acres removed in 2022 at 13,078 acres. That was 7 percent below Fresno County's uprooting total and more than twice that of third-highest Stanislaus County.
Kern and Fresno counties also greatly outpaced California's other almond-producing counties this year in orchard abandonments with 6,467 and 6,531 acres, respectively, the report said.
Crop sizes have caused growers anxiety this year because of a record-high carryover inventory from last season. Good news arrived in July with word the 2022 crop will end up 11 percent smaller than in 2021 because of a spring frost that damaged orchards, more in northern counties than in Kern, combined with impacts from the drought.
Senior Analyst and Vice President David Magaña at RaboResearch Food & Agribusiness said by email almond prices remain under pressure because of high inventories not only in the United States but also in some destination markets.
He noted demand is slow in key markets while inflation cuts into consumer budgets and a strong U.S. dollar lowers the affordability of California exports overseas.
"Given this backdrop," he wrote, "it is not likely to see almond prices significantly recover in the next few weeks/months. In the longer-run, demand for California tree nuts should improve as the global middle class expands."
Declining prices for local almond acreage reflect the negative outlook.
The latest update from local farmland appraiser and broker Michael G. "Mike" Ming shows steepening decline in the value of almond acreage.
It showed prices at the low end sinking this year to about $13,000 per acre, a level not seen since about 2009, and dropping at the high range to 2013's baseline of $30,000 per acre.
Orchards in well-positioned water districts do better, Ming noted, but it's harder for those further west whose poor groundwater quality makes them reliant on what are now severely limited surface water deliveries.
He made two predictions: a continued downward trend at the lower range of almond farmland prices, and in some cases, replanting with different crops once an orchard nears the end of its productive life.
"Farmers," Ming said, "are very smart and understand the cost-benefit analysis of planting back to either pistachios or, in some cases, they will plant back to almonds, or another crop that gives them more flexibility, like a row crop."
Kern County almond grower Kent Stenderup said farmers always wonder what goes into decisions to remove orchards. But now they can guess more confidently.
"Often these days, it's water," he said. "It literally drives your decision."
Some landowners probably will turn to other crops, Stenderup said.
"It's not necessarily a sad thing," he said. "Maybe it's going to help our oversupply and pricing."
