Business
A billion pounds of California almonds stranded at ports amid drought, trade woes
Almond producer David Phippen didn’t want to listen to the most recent predictions from agriculture economists to know that his trade was on the verge of shedding its premier place within the world market.
He noticed it coming through the COVID-19 pandemic in 2020, when oceanic carriers found they might make twice as many annual spherical journeys — and better revenue margins — by sending empty containers again to Asia to select up extra items for export as an alternative of ready in port right here to be loaded along with his almonds. Almond exports are down by about 13% this yr, trade officers stated.
“It’s all about cash,” Phippen, 72, stated, shaking his head in frustration on a latest sizzling and sticky morning. “After years of prospering collectively, international delivery vessels have determined to cease servicing us.”
Now, the powerhouse almond trade is in a pickle. Roughly 7,600 California farms produce 82% of the world’s almonds. However they don’t receives a commission till their product will get delivered in sturdy markets just like the European Union, China, India and the United Arab Emirates.
Almonds enter a processing machine in Manteca.
(Paul Kuroda / For The Instances)
In consequence, the prospect of harvesting 2.8 billion kilos this yr — simply shy of the two.9 billion kilos in 2021 and the file 3.1 billion kilos in 2020 — has trade leaders each excited and anxious. That’s as a result of about 1.3 billion kilos of unsold almonds are nonetheless sitting in piles at processing and packing services.
The issue comes at a time when inflation and a historic drought are pushing the prices of manufacturing and water provides to an all-time excessive, and the worth of almonds has fallen to an all-time low of about $2 per pound.
It’s a pointy reversal for the trade after 4 a long time of relentless enlargement throughout 1.6 million acres in California’s agricultural Central Valley from Tehama County to southern Fresno County.
“We’re operating right into a supply and cash-flow disaster,” stated Aubrey Bettencourt, chief govt of the Almond Alliance of California. “From final September to February, the almond trade misplaced $2 billion in worth — that’s some huge cash that’s not going into our communities.”
“If we are able to’t sort out this drawback,” she added, “our merchandise will probably be changed with one thing else.”
David Phippen walks in his subject dug out to plant almond timber in Manteca.
(Paul Kuroda / For The Instances)
It’s a dilemma that David Phippen and his brother Scott, companions of Travaille & Phippen Inc., a family-owned rising, processing, packing and gross sales enterprise in Manteca, Calif., know firsthand.
“The massive query from prospects world wide nowadays,” Scott Phippen, 68, stated, “is that this: When will we get our almonds?”
The bottleneck on the Port of Oakland, traditionally the most important gateway for Central California dried fruits and nuts certain for worldwide markets, is predicted to tug on for months to come back.
The excellent news, growers prefer to level out, is that the nutritious oval-shaped nuts have a shelf lifetime of about two years.
David Phippen walks on his new warehouse that’s beneath development in Manteca.
(Paul Kuroda / For The Instances)
As a part of an effort to keep away from being overwhelmed by new crops anticipated to reach in September, the Phippens are constructing a 40,000-square-foot warehouse, and just lately paid about $800,000 for 3,000 new picket storage bins.
Inside a close-by processing facility, staff carrying gloves and hairnets have been inspecting rivers of almonds flowing alongside conveyor belts earlier than they’d be packaged for cargo.
“We’ve got loads of almonds,” David Phippen stated. “The issue is getting them to individuals who can pay for them.”
David Phippen appears to be like at a cluster of almonds in his orchard in Manteca.
(Paul Kuroda / For The Instances)
Scott Phippen holds an almond reduce open in his orchard.
(Paul Kuroda / For The Instances)
The crunchy nuts have come a good distance since California pioneers in 1850 planted their first almond timber in Sacramento, Monterey and Los Angeles.
The nut didn’t come into its personal as a snack product till 1968, when a cooperative persuaded American Airways to purchase Blue Diamond Smokehouse Almonds to offer away as in-flight munchies.
Blue Diamond’s success quickly lured different almond considerations into the snack market and opened the door to a galaxy of modern merchandise: almond butter, almond shaving cream, almond-flavored Champagne, high-protein almond milk, almond ice cream, sweet and cookies, even almond oil appropriate for solar bathing and frying fish.
Attracted by the product that doesn’t spoil and doesn’t require a lot guide labor, almond growers planted 74,000 acres within the late Seventies.
At the moment the Golden State harvests the tree nut throughout a 500-mile stretch of farmlands that made almonds the No. 1 California agricultural export in 2021 at $4.7 billion — that’s 3 times greater than within the Nineteen Nineties.
Scott Phippen subsequent to a pile of hulls and shells that will probably be offered as cattle feed in Manteca.
(Paul Kuroda / For The Instances)
This yr, with the state’s agricultural heartland struggling by a 3rd yr of drought, farmers are having to make powerful choices about abandoning orchards of the thirsty everlasting crops that want year-round water.
The 2021 drought alone price the California agricultural sector about $1.1 billion and practically 8,750-full-time jobs, in accordance with a latest evaluation led by UC Merced researchers.
On one other entrance, growers are in search of state and federal assist in establishing new, extra dependable delivery methods. Proposals beneath dialogue embody bypassing the Port of Oakland altogether by having almonds and different agricultural merchandise moved by rail to delivery corporations alongside the U.S. Gulf Coast.
Final month, trade leaders partnered with railroad corporations to create a small experimental “pop-up” agricultural terminal within the Los Angeles-Lengthy Seaside port advanced.
“We’ve got to go the place there are boats that may transfer our merchandise,” Bettencourt stated. “So, it’s all aboard the brand new almond specific trains rolling into L.A. harbor.”
Employees take away unacceptable almonds in Manteca.
(Paul Kuroda / For The Instances)
The challenges dealing with almond growers check the boundaries of compassion amongst environmentalists who’ve lengthy criticized their trade’s outsized position in tapping the arid area’s water provides. The trade responds that the water permits it to generate greater than 100,000 jobs statewide and compete in a world market flooded with low cost international crops.
The controversy is hardly new. Over the a long time, because the Central Valley has grown into the best agricultural area on this planet, environmentalists, growers and politicians have grappled with the problems of water and the scale of water-intensive almond, pistachio, hazelnut and walnut farms.
In keeping with trade stories, almond orchards make up lower than 13% of the state’s complete irrigated farmlands and use solely 9% of the state’s agricultural water.
However at a time when Gov. Gavin Newsom is asking on Californians to voluntarily cut back water use by 15%, critics say, it nonetheless takes 1.1 gallons of water to develop an almond, and to develop a pound of almonds requires about 1,900 gallons of water.
“California’s local weather is irrevocably altering amid the worst drought in recorded historical past,” stated Jessica Gable, a spokeswoman for the nonprofit group Meals and Water Watch. “We’re risking excessive water shortage except we transition to rising crops far much less water intensive than almonds.”
David Phippen wouldn’t go that far.
David Phippen walks by one among his producing almond orchards in Manteca.
(Paul Kuroda / For The Instances)
In spite of everything, world demand for almonds stays sturdy, particularly at decrease costs. So, he’d desire to attend and see how the 2022 crop shakes out over the following a number of months.
“Name me optimistic,” he stated, “however issues truly appear to be getting a bit of higher.”