Business
After years of rapid growth, California's almond industry struggles amid low prices
For much of the last decade, almonds have been such a lucrative crop that growers and investment firms have poured money into planting new orchards across vast stretches of California farmland.
Now, the almond boom has fizzled and the industry has entered a slump. Prices have dropped over the last several years, and the state’s total almond acreage has started to decrease as growers have begun to tear out orchards and plant other crops.
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In a sign of the troubles besetting the industry, one large almond-growing conglomerate has declared bankruptcy.
In a series of Chapter 11 filings in federal bankruptcy court, Trinitas Farming and other affiliated companies said that record-low almond prices and high interest rates contributed to their “serious liquidity constraints.”
The group of companies said in a court document filed Feb. 19 that they own 7,856 acres of almond orchards in five counties, including Solano, Contra Costa, San Joaquin, Fresno and Tulare. As part of the bankruptcy proceedings, these orchards are expected to be put up for sale.
“When the price is low, now we start seeing the results of it. And certainly the fear is that Trinitas is the tip of the iceberg,” said Jake Wenger, general manager of the Salida Hulling Assn., which runs an almond-hulling plant in Modesto.
Prices for premium almonds have dropped from nearly $4 a pound a decade ago to about $2 a pound or less, Wenger said. Though the low prices are affecting all growers, those that are being hit especially hard are the many investor groups that bought land when prices were high and now have large debts, he said.
“The question becomes, do some of these banks call on some of these loans? And that’s really going to be a concern for a lot of people in the industry,” Wenger said. “Nobody got more indebted to the banks than a lot of these investor groups.”
A highway in Buttonwillow, Calif., bisects Kern County growing fields, with a large almond orchard on the left.
(Brian van der Brug / Los Angeles Times)
The group that filed for bankruptcy includes Trinitas Advantaged Agriculture Partners IV, LP, an investment fund that was formed and managed by Redwood City-based Trinitas Partners, a private equity investment company. It also includes the investment fund’s subsidiary Trinitas Farming, based in Oakdale, and 17 other subsidiaries.
The group’s lawyers said in court documents that the investment fund was organized by Trinitas Partners in 2015 to develop and operate almond farms in the Central Valley. It said the companies were ”well-positioned to become profitable ventures” but that they were ultimately “unable to raise necessary capital” through investments or from potential sales of assets. The entities’ reported debts total approximately $180 million.
Trinitas Partners itself was not among the companies that filed for bankruptcy. Representatives of the companies did not respond to requests for comments about the matter.
“I really firmly believe they’re not going to be the only ones facing financial struggles,” Wenger said.
The low prices appear to be making it difficult for some investments to pencil out. Wenger and others in the almond business have noticed some orchards abandoned in parts of the Central Valley over the last year, with rows of unkempt trees now filled with weeds.
“We’re already seeing people walk away,” Wenger said.
He said he believes almond prices will eventually rebound, but it’s not clear when that turnaround might come.
“I certainly don’t think we’ve seen the worst of it yet,” Wenger said.
While various factors have contributed to the situation, Wenger and others say some of the issues weighing on prices include an oversupply of almonds after years of rapid growth.
A grower examines a cluster of almonds in a Manteca, Calif., orchard in June 2022.
(Paul Kuroda / For The Times)
California produces about 80% of the world’s supply of almonds. And according to federal data, the state’s harvested almond orchards skyrocketed from 760,000 acres in 2011 to more than 1.3 million acres in 2022.
In the last two years, though, annual mapping of orchards has shown that California’s total almond acreage has started to decline.
Over the last decade, the almond boom coincided with growing concerns about water in California. When growers and investment companies bought land and drilled wells to pump groundwater in the Central Valley, the expanding nut orchards locked in long-term water demands and added to the strains on the state’s declining aquifers.
Wenger said he thinks it’s possible that if some of these orchards come out of production, groundwater levels could rise in places.
“It depends on what cropping patterns come in, and what happens next,” he said. “But it does have a potential that we could see benefits to groundwater.”
Critics who have questioned the amount of water dedicated to growing almonds include Bill Maher, who recently drew laughs on his show when he urged Gov. Gavin Newsom to “take on Big Almond.”
The environmental group Food and Water Watch has also urged the state to limit the expansion of almond orchards and other water-intensive crops such as alfalfa. Chirag Bhakta, the group’s California director, said the expansion of almonds has “locked us into a situation where we’re growing way too many of these thirsty tree nuts in parts of California,” adding to the problems of overpumping of groundwater.
Bhakta said it’s hard to know if the bankruptcy case points to more trouble ahead in the industry. But he said it represents an “opportunity for us to shift what’s been grown on that land to actually reflect what’s best for California” and the state’s water needs.
Representatives of the almond industry have defended the crop’s water use, pointing to agricultural statistics showing almonds cover 21% of irrigated agricultural land in California but account for 14% of agricultural water use. They have also noted that in addition to the nuts, almond hulls are used for cattle feed.
In the coming years, California’s agriculture industry will face water limits under the requirements of the state’s 2014 Sustainable Groundwater Management Act. The law requires local agencies in many areas to develop plans to curb overpumping by 2040.
Researchers with the Public Policy Institute of California have estimated that addressing the groundwater deficit in the San Joaquin Valley will probably require taking at least half a million acres of farmland out of production, and they’ve called for expanding efforts to help convert farmland to other uses, such as solar development or habitat areas.
Aside from water constraints, the almond industry has faced other challenges, including tariffs in China and other countries, as well as shipping bottlenecks during the COVID-19 pandemic.
“There has just been a glut in the almond market for a couple of years now,” said Caity Peterson, associate director of the Public Policy Institute of California’s Water Policy Center.
“It’s possible that we have hit peak almond,” Peterson said. “The industry will probably right-size itself to where the supply better meets the demand and it’s not oversupply, like we’ve got right now.”
Some experts say the almond industry is likely to bounce back. Analysts with Rabobank wrote in an analysis this month that “a strong rebound in almond prices is expected over the next 12 to 18 months.”
International markets have a big influence. According to the most recent crop data for the 12 months that ended in July 2023, 72% of the state’s almonds were exported, while 28% were sold domestically.
California’s total almond acreage has gone down the last two years mostly because of decreases in new plantings, said Rick Kushman, a spokesperson for the Almond Board of California.
“Orchards last about 25 years, then growers replant, if they decide to. It’s possible that financing has been harder to get and it is surely more expensive right now,” Kushman said in an email. “Shipments have been strong in recent months, but we are a long way from seeing if that will affect planting decisions.”
There are roughly 7,600 almond farms in the state, and about 70% of the state’s orchards are under 100 acres, according to the Almond Board of California.
Wenger said those who are better suited to weather this sort of downturn are family-run businesses that own their land debt-free.
Almond growers aren’t the only ones in agriculture who have been dealing with tough economic conditions.
“Walnut prices are terrible. Grape prices are terrible,” Wenger said. “Pistachios are not doing great. So we have all these crops that are starting to suffer.”
The fall of the Trinitas almond business follows the recent news that the large fruit grower Prima Wawona also filed for bankruptcy.
Some growers in the San Joaquin Valley have chosen to replace almond trees with pistachio orchards.
Blossoms fill an almond tree branch in an orchard near Sanger. California produces about 80% of the world’s supply of almonds.
(Gary Coronado / Los Angeles Times)
Still, most of California’s almond orchards remain, and almond trees have been blooming with white and pink flowers in the Central Valley.
“Agriculture in general is seeing some very difficult times,” said Bill Lyons, a farmer in Stanislaus County who once served as state agriculture secretary under Gov. Gray Davis.
On his family’s century-old ranch, they have a cattle operation and grow a wide variety of crops.
“We’ve been in the almond business for over 25 years, and we’re seeing unprecedented low prices for multiple years, and very high expenses,” Lyons said. “And when you combine the two, it’s extremely difficult for any almond farmer to make a profitable living.”
He said where some landowners have abandoned their trees, it’s a problem for neighboring growers because the untended orchards can harbor pests — such as navel orangeworm — that can spread to nearby orchards.
Lyons said his family plans to keep growing almonds.
“Hopefully, the almond price will gain momentum,” Lyons said. “I have confidence in the almond industry, but it’s definitely going to be a serious bump in the road as we travel through to next year or so.”
Times staff writer Kevin Rector contributed to this report.
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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