The University of California at Davis publishes an excellent agriculture newsletter. In the Sept/Oct 2022 issue, Prof. Colin A. Carter and Sandro Steinbach offer the following insights into the California almond industry (big business here in the Central Valley):
“California almond tree acreage has expanded by roughly three-fold since 2000. As a result, the industry relies more on foreign buyers to purchase the growing supply of almonds.
“Combined with the acreage growth, recent international trade disputes and supply chain problems have resulted in an oversupply of California almonds, with end-of-year inventories close to an unusually high 30% of the harvest …
“Table 1 summarizes California’s almond supply and demand from the 2016/17 marketing year – from August through July – to the 2021/22 marketing year.
“Almonds are the most valuable crop produced in California, and over 70% of the harvest is exported internationally. The annual value of almond exports is over $4.5 billion, far higher than any other agricultural product shipped out of California.
“Grower prices for almonds are down over 25% since 2019 and are now below production costs for those farmers who are paying high prices for irrigation water. Warehouses are full, and temporary storage is being relied upon at higher storage costs …
“The supply and demand situation has eased somewhat because of the drought, and low crop prices curtailed water use and lowered the 2022 harvest volume by about 6% from the previous year. However, almond inventories continued to build up.”
A sobering analysis, indeed.
Citation: Carter, Colin A. and Sandro Steinbach. 2022. “California Almond Industry Harmed by International Trade Issues.” ARE Update 26(1): 1–4. University of California Giannini Foundation of Agricultural Economics.
Colin A. Carter is a Distinguished Professor in the Department of Agricultural and Resource Economics at UC Davis.
Sandro Steinbach is an associate professor in the Department of Agribusiness and Applied Economics and the Director of the Center for Agricultural Policy and Trade Studies at North Dakota State University.