State of the Industry: Another Challenging Year but Hope Lies Ahead

California almond growers experienced yet another taxing and financially draining season over the past 12 months. Before growers could recover from the aftershock of last year’s hardships, a wave of new difficulties overcame the industry in 2023. 

However, this year’s 51st Annual Almond Conference lifted spirits for some, as it provided an opportunity for comradery, collaboration on resources, and insight into the factors that the industry can control.  

“For the short-term outlook, things will remain difficult and tough decisions will have to be made,” said Alexi Rodriguez, chair of the Board of Directors at the State of the Industry Presentation. “But...we do believe there's good reason to remain optimistic about the future of almonds and their profitability.” 

Production and Consumption Stay Favorable 

A lot has changed in terms of growth, production, and additional plantings, and it’s important to assess how almonds measure up against other tree nuts, said Richard Waycott, former Almond Board of California (ABC) president and CEO.  

Today, 3.5 billion pounds of almonds are being produced globally – approximately 1 billion more than 10 years ago. Production remains high in California, making up about 75% of all world production, but this number has been higher, which suggests increasing competition from producers in Spain and Australia. 

Almonds aren’t the only nut that has seen this amount of scale. Collectively, tree nuts have increased total trade net supply in the world by 64% in the last decade. Positively, almonds are still the favorite nut and hold a hefty consumption lead over their nearest competitor, cashews, but there is still lots of room for more consumption globally, Waycott noted.

Acreage Drops 

On the other hand, for the second year in a row, the industry is witnessing a decrease in total almond acreage from the year previous, said Bryce Spycher, ABC senior manager of Marketing Order Services. Nonbearing acres are down by nearly 100,000 acres – almost half of where it was in 2021, and the number of orchards removed continues to rise. 

Additionally, one of the lasting effects of the 2022 season was 438 million pounds of excess inventory, accounting for two months of the industry’s shipments. ABC has been vigilant in discovering new export markets to offload these nuts, particularly in their target regions of Asia-Pacific, Western Europe and Middle East/Africa. 

Trade Environment 

Following last year’s nightmare, trade has been a troubling concern for the industry. Doug McKalip, chief agricultural negotiator at the Office of the United States Trade Representative (USTR) addressed some of these concerns with the audience, stating there has been “boots on the ground” to make progress in this area. 

Top of mind for many growers is the trade restrictions with China, India and Turkey due to retaliatory tariffs. While the United States faced obstacles with these countries, simultaneously, our competitors negotiated solid trade relationships with them, which undoubtedly hindered California almond shipments. 

To combat this, McKalip explained the efforts being done by USTR to better establish one-on-one relationships with trade partners and their resolution of a bilateral engagement with the Indian government to eliminate the tariff. A step in that direction came in early September when India announced the elimination of retaliatory tariffs on several U.S. products, including almonds.  

McKalip noted that their team has also worked towards reducing farmer input costs.  

“In November, we announced a reduction of the duty on phosphorus-based fertilizer from Morocco and that duty is going to go from about 19% down to 2%,” McKalip said. “In addition, USDA announced a $900 million initiative for domestic fertilizer development.” 

Additionally, the administration is collaborating with trade partners to develop better transparency on standards and protocols to avoid containers being rejected – like the industry has seen this fall in Italy – or any loss of revenue throughout the supply chain.

Maximizing Efficiencies with Research 

The resiliency of almond farmers over this past year helped the ABC pivot to focus on strategy, innovation, and further research to drive efficiencies. 

Irrigation has always been an area that can be costly for growers, so ABC has invested in research focusing on actual evapotranspiration, or actual ET, to precisely dial in tree water demand, said Josette Lewis, ABC chief scientific officer. 

Lewis also mentioned that ABC is funding research to update honeybee stocking recommendations, with the hopes of saving growers money and providing more insight on self-fertile varieties. 

Driving Global Demand 

ABC Vice President of Global Market Development, Emily Fleischmann, discussed the current campaigns ABC has worked on over the past year to help drive global demand, including their biggest partnership to date with Deion Sanders, also known as Coach Prime and the 2023 Sports Illustrated Sportsperson of the Year.  

Additionally, Fleishmann highlighted two other exciting campaigns in major markets.  A “Mother Nature” spokesperson touting almonds as the mother of all snacks is currently featured in Germany and  California almonds were broadcast digitally and on TV and billboards during the Cricket World Cup in India.

Finding a Silver Lining 

All things considered, there is a silver lining amidst these challenges; many challenges are no longer new, which means the industry can more clearly define them and address them more effectively. In doing so, growers must remain robust, positive and steadfast to weather the storm.  

“Today as the industry struggles to deal with the challenges, many of which we don't control, it's critical to pull together and focus on what we can control and what we can influence to find our way forward,” concluded Clarice Turner, ABC president and CEO. “We have some difficult times to endure. But I'm certain that strong leadership, focus, and the industry DNA of grit and innovation will get us to a better place in the near future.”