SACRAMENTO—California’s almond growers are poised to harvest another record-breaking crop for 2010, reports the California Farm Bureau Federation, and the Almond Board of California is confident that it can continue to cultivate progressively increased worldwide demand to keep pace with the bounty.
The industry predicts that farmers will harvest 1.65 billion pounds of almonds this year—a 17% increase from 2009.
However, such a bumper crop can catalyze negative consequences for the industry if demand doesn’t likewise increase. As noted by Kelly Burkholder, marketing manager, Harris Woolf Almonds, almond production above 1.6 billion pounds would put downward pressure on prices, while under 1.5 billion pounds would support prices; a harvest from 1.5 to 1.55 billion pounds would have a neutral effect.
But demand for crops like almonds can sometimes quickly change directions. For instance, last fall, almonds were selling for low prices of $1.10 to $1.20 per pound. Then, a few months later during early 2010, prices doubled to $2.20 to $2.30 per pound.
Another interesting piece of this puzzle is China. Last year, the country took the top spot as the largest importer of almonds in the world, buying up 124 million pounds. However, some of those almonds are being resold by China, often hitting the market via Hong Kong traders, who then sell the nuts to European markets. Therefore, the United States is finding that it is sometimes competing with demand for its own product being resold overseas.
Market fluctuations can, however, adversely affect such “buy low, sell high” tactics. Price changes sometimes have proven that China paid too much for a crop and cannot move it for a profitable price. China has recently baked off of imports, ceding the No. 1 importer of almonds spot to Spain.
Almonds remain the most-inexpensive nut on the market compared to walnuts, pecans and pistachios. However, almond consumption patterns look up, so they should remain competitive from a price perspective, potentially providing better margins.
