California almond growers are feeling the squeeze

Almond producer David Phippen doesn’t need to hear the latest predictions from agricultural economists to know that his industry is on the verge of losing its leading position in the global market.

He saw it happen during the COVID-19 pandemic in 2020, when ocean carriers discovered they could double the number of annual round trips – and profit margins higher – by sending empty containers back to Asia for more export goods instead of waiting. port here to be loaded with his almonds. Industry officials say almond exports are down about 13% this year.

“It’s all about the money,” said Phippen, 72, shaking his head in disgust on a recent hot, muggy morning. “After many years of thriving together, foreign shipping vessels have decided to stop serving us.”

Now, the powerhouse almond industry is in dire straits. About 7,600 farms in California produce 82% of the world’s almonds. But they don’t get paid until their products are distributed in strong markets like the European Union, China, India and the United Arab Emirates.

Almonds into a processing machine in Manteca.

Almonds into a processing machine in Manteca.

(Paul Kuroda / For The Times)

As a result, the prospect of a harvest of £2.8 billion this year – just £2.9 billion behind in 2021 and a record £3.1 billion in 2020 – has industry leaders both excited and nervous. . That’s because about 1.3 billion pounds of unsold almonds are still lying in piles at processing and packing facilities.

The problem comes at a time when inflation and historic drought are pushing water production and supply costs to all-time highs, and almond prices have fallen to an all-time low of around $2/ pounds.

It’s a dramatic reversal for the industry after four decades of relentless expansion across 1.6 million acres in California’s Agricultural Central Valley from Tehama County to southern Fresno County.

“We are experiencing a delivery and cash flow crisis,” said Aubrey Bettencourt, executive director of Almond Alliance of California. “From September to February, the almond industry lost $2 billion in value – that’s money that can’t be poured into our community.”

“If we can’t solve this problem,” she added, “our product will be replaced by something else.”

David Phippen walks in a field dug for almond trees in Manteca.

David Phippen walks in a field dug for almond trees in Manteca.

(Paul Kuroda / For The Times)

It was a dilemma that David Phippen and his brother Scott, partners of Travaille & Phippen Inc., a family-owned growing, processing, packaging and selling business in Manteca, California, knew in advance. .

Scott Phippen, 68, said: “The big question from customers around the world these days is: When will we get the almonds?”

The bottleneck at the Port of Oakland, formerly the main gateway for Central California dried fruit and nuts exported to international markets, is expected to last for many months to come.

The good news, growers love to point out that nutrient-rich oval nuts have a shelf life of about two years.

David Phippen walks on the new warehouse under construction in Manteca.

David Phippen walks on the new warehouse under construction in Manteca.

(Paul Kuroda / For The Times)

As part of an effort to avoid being overwhelmed by new crops slated to arrive in September, Phippens is building a 40,000-square-foot warehouse and recently paid about $800,000 for 3,000 containers. new wood.

Inside a nearby processing facility, workers wearing gloves and hair wraps are checking the river of almonds that flow along a conveyor belt before they’re packed for shipping.

“We have a lot of almonds,” says David Phippen. “The point is to get them to people who will pay for them.”

David Phippen looks at a bunch of almonds in his orchard in Manteca.

David Phippen looks at a bunch of almonds in his orchard in Manteca.

(Paul Kuroda / For The Times)

Scott Phippen is opening an almond in his garden.

Scott Phippen is opening an almond in his garden.

(Paul Kuroda / For The Times)

Crispy nuts have come a long way since California pioneers in 1850 planted their first almond trees in Sacramento, Monterey, and Los Angeles.

The nuts didn’t become a snack product until 1968, when a cooperative convinced American Airlines to buy Blue Diamond Smokehouse Almonds to give away as in-flight pies.

Blue Diamond’s success quickly attracted other almond concerns into the snack market and opened the door to a galaxy of innovative products: almond butter, almond shaving cream, ginseng liquor Almond crackers, protein-rich almond milk, almond ice cream, candies and cookies, even almond oil are suitable for sunbathing and frying fish.

Lured by the product that doesn’t spoil and doesn’t require much manual labor, almond growers planted 74,000 acres in the late 1970s.

Today, the Golden State’s tree-nut harvest on 500 miles of farmland makes almonds California’s No. 1 agricultural export by 2021 with a value of $4.7 billion – three times more than that. the 1990s.

Scott Phippen with a pile of hulls to be sold as fodder in Manteca.

Scott Phippen with a pile of hulls to be sold as fodder in Manteca.

(Paul Kuroda / For The Times)

This year, with the agricultural heartland of the state grappling with a third year of drought, farmers are making the difficult decision of abandoning their often thirsty orchards that need year-round water.

The 2021 drought alone will cost the California agricultural industry about $1.1 billion and nearly 8,750 full-time jobs, according to a recent analysis led by UC Merced researchers.

On the other hand, growers are seeking state and federal help in establishing new, more reliable transportation strategies. Proposals being discussed include bypassing the Port of Oakland entirely by shipping almonds and other agricultural products by rail to shipping companies along the US Gulf Coast.

Last month, industry leaders partnered with railroad companies to create a small experimental “pop-up” agricultural port in the Los Angeles-Long Beach port complex.

“We have to get to where there are boats that will move our product,” says Bettencourt. “So it’s all on the new almond express trains rolling into LA harbor.”

Workers remove unacceptable almonds in Manteca.

Workers remove unacceptable almonds in Manteca.

(Paul Kuroda / For The Times)

The challenges facing almond growers test the limits of compassion among environmentalists, who have long criticized their industry’s overwhelming role in exploiting water supplies. for arid areas. The industry responds that water allows them to create more than 100,000 jobs statewide and compete in a global market flooded with cheap foreign crops.

The debate is hardly new. For decades, as the Central Valley has grown into the most productive agricultural region in the world, environmentalists, growers and politicians have grappled with issues of water and scale. of intensive almond, pistachio, hazelnut and walnut farms.

According to industry reports, almond groves account for less than 13% of the state’s total irrigated farmland and use only 9% of the state’s agricultural water.

But at a time when Governor Gavin Newsom is urging Californians to voluntarily reduce their water use by 15%, critics say, it still takes 1.1 gallons of water to grow an almond and to grow a pound. Almonds require about 1,900 gallons of water. .

“California’s climate is changing irrevocably amid the worst drought in recorded history,” said Jessica Gable, a spokeswoman for the nonprofit group Food and Water Watch. “We are facing extreme water scarcity unless we switch to less water-intensive crops than almonds.”

David Phippen wouldn’t go that far.

David Phippen walks past one of his producing almond orchards in Manteca.

David Phippen walks past one of his producing almond orchards in Manteca.

(Paul Kuroda / For The Times)

After all, global demand for almonds remains strong, especially at lower prices. So he wants to wait and see how the 2022 crop plays out over the next few months.

“Call me an optimist,” he said, “but things really do seem to be getting a little better.”

https://www.latimes.com/environment/story/2022-07-05/california-almond-growers-are-feeling-the-squeeze California almond growers are feeling the squeeze

Edmund DeMarche

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