Though the final numbers aren't out yet, there's little doubt that California has had another record almond harvest. The numbers are up for several reasons. Over the last decade, almond acreage has risen by 43 percent and the number of trees per acre has risen by 11 percent. When it comes to harvest per acre, 1998 was a bad year, so I'll average 1997 and 1999, both of which set records at the time. Using the latest estimate, this year's harvest per acre will be 32 percent higher.
Put all that together, and the tonnage harvested this year is 88 percent higher than 1997/1999. Heck, it's 34 percent higher than the harvest just two years ago, which at the time was a record. Pollination hasn't proven to be an issue, but too much production is now another story.
Tejon Ranch Co., the Lebec ranching and real estate development company, said in a quarterly report filed with the Securities and Exchange Commission that it received $1.78 per pound for almonds in September. That’s down from a peak of $3.80 in the last three years.
Today, almonds are going for $1 to $1.25 a pound, said Mike Young, an almond grower and president of the Kern County Farm Bureau.
In the SEC report, Tejon Ranch warned investors it is keeping an eye out for overproduction.
Oh, and the nation should also watch out for a housing bubble.
In the meantime, “We have the extra cost of warehousing them every month, which is another 15 cents a pound that’s going to come off the price,” Young said.
Market weakness comes at a time when many almond growers are already smarting from a mandatory pasteurization rule that took effect in California last year.
It requires raw almonds to be fumigated or heated before they can be sold to American consumers. Foreign growers have no such obligation, which some domestic producers argue puts them at a disadvantage. Critics have asked courts to overturn the mandate.
The article suspiciously failed to mention that the Almond Board of California pushed for the requirement because of two salmonella outbreaks related to raw almonds that threatened sales (previous blogs here and here). About 95 percent of almonds sold were already cooked in some way: roasted, blanched, baked, etc. Now the raw foodies have to buy imports, which of course aren't necessarily any safer than domestic raw almonds were last year. Organic producers have been hit the hardest.
California produces about 80 percent of the world's almonds. If necessary, the nuts should keep for a year or so.
(Laughs out loud.)
You ever think about writing? Imagine...housing bubble and nuts in the same article.
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Posted by: OregonGuy | January 01, 2009 at 07:56