California weather and groundwater regulation will likely determine whether US almond producers face oversupply or undersupply over the coming decade, according to a recent CoBank report.
The report, entitled Risk of Oversupply, was published November 20 and based on consultations with a dozen almond industry representatives. It provides an outlook for almond production over the next 10 years and describes the most recent five-year period, during which challenging weather conditions and bloom issues have kept California yields relatively flat amid booming demand.
According to the Almond Board of California, the state produces about 80 percent of global almond supply and 100 percent of US commercial production of the crop.
CoBank senior economist for specialty crops Crystal Carpenter wrote that unpredictable effects of California’s Sustainable Groundwater Management Act (SGMA) – which requires municipalities to regulate groundwater use in medium and high-priority basins by January 2022 – currently makes it particularly difficult to forecast almond supply.
“Good weather could help return yields to trend, or regulation could lead to greater acreage growth rates in the comparatively lower-yield northern regions and hamper growth on state average yields,” Carpenter noted, highlighting that almond yields are 28 percent lower in the northern regions of the state, which are less reliant on groundwater, than their southern peers.
Other factors likely to influence almond supply in the coming decade discussed in the CoBank report include the expected culling of trees nearing the end of their 20 to 25 year lifespans and the possibility that rising labor and productions costs could encourage producers to convert land currently planted with fruits and vegetables to almonds.
“The tight supply and strong demand are driving almond prices up, and with it, the expected pace of near-term almond acreage plantings,” wrote Carpenter, who was unavailable for further comment.
Russell Harris, president and chief executive of Chowchilla, California-headquartered almond producer Harris Family Farms, confirmed to Agri Investor that recent years’ rising almond prices and demand did prompt some producers to plant almonds in regions not well-suited to the crop.
Harris estimated about 40 percent of California almonds are currently planted in regions that have received less than one acre-foot of surface water over the past 15 years. Land prices have fallen dramatically, he said, in such “white lands,” or properties reliant on groundwater as a single water source.
In Chowchilla, for example, Harris said there are currently about 55,000 acres of permanent crop plantings in white lands, only 14,000 of which are likely to be able to continue production under proposed SGMA caps on groundwater use.
“Me and other farmers like me are moving to where water is. Although land might not be as good, as long as you have plenty of water, you are going to farm 100 percent of your ground,” he said. “In white lands, where you have to have five acres [of allowable groundwater use] to farm one; you’re never going to make it.”
Regarding culling, Harris said while it is true that almond trees generally last between 22 and 27 years, some can have shorter or longer lives based on the quality of root stock, soil conditions and water supply. Ultimately, whether and when producers chose to cull aging almond trees will be influenced by their own economic position, said Harris, who said his firm has been involved in the sale about a quarter of all almond trees in California.
“I hope they keep pulling them out. That way I can I can keep selling them new ones!” he added.