State

Almonds: Preliminary forecast of 1.53B pounds is good news

The Northern San Joaquin Valley economy, which has been struggling with soaring unemployment and a battered housing market, got a boost Thursday from a sector that continues to produce strong results — agriculture.

The orchards in the valley and around the state could yield about 1.53 billion pounds of almonds, according to a key early projection. Those nuts end up in snack bags, baked goods, breakfast cereals and many other products bought and sold around the world.

The National Agriculture Statistics Service's initial harvest projection released Thursday is up 8.5 percent from last year's production of 1.41 billion pounds. If the crop is as large as expected, it would be the second-largest almond harvest in the state since 1999.

Almonds are second only to milk among farm products in the Northern San Joaquin Valley. The nuts brought an estimated $654 million in gross income to the region's growers in 2008.

The projection for this year's crop is a rare economic bright spot for a region that has been especially hard hit since the housing bubble burst more than four years ago and the national recession began. Agriculture, more than any other sector of the valley economy, consistently has generated profits and jobs. Gross farm income nearly doubled from 2000 to 2008, to an estimated $7.6 billion worth of milk, fruit, nuts, poultry and other products.

While agribusiness has some troubles of its own — notably the still-low prices for dairy farmers — economists see ag as an enduring source of strength for the region.

The large crop projection is welcome news to the region's almond industry.

"It makes sure that it will be a good stable market," said Ron Fisher, owner of Fisher Nut Co. of Modesto. "It's overall good news. We have almonds to sell. I'm optimistic."

California produces about 80 percent of the world's almonds, and they are the state's No. 1 farm export.

Still, Thursday's large almond crop estimate was a bit of a surprise given the up-and-down weather this spring. Heavy rains raised early worries about rot, fungus and lack of pollination by bees.

In his March-April company report, Blue Diamond Chief Executive Officer Doug Youngdahl expressed initial concern that the El Niño weather had "dampened hopes for another record crop to feed the rapidly growing global market for almonds" and wrote that "we can only hope for at least similar results (as 2009) despite more adverse weather conditions in 2010."

First of two forecasts

The report says the crop was in good condition for the August harvest. The forecast, the first of two the ag statistics service puts out about almonds, was based on a telephone survey of 317 growers. The next report, based on a physical measurement of the crop, will be released at the end of June.

Market prices for almonds are substantially higher from this time last year. Prices have rebounded to about $2.60 a pound for nonpareils and $2.20 for others.

But it's a delicate balance. Growers want a price high enough to make a profit, but not so high that it drives away buyers.

A large harvest is key for the industry to keep up with demand. Turlock-area grower Charles Crivelli said the industry was hoping for at least 1.6 billion pounds, just shy of the record harvest in 2008.

"We continue to develop consumption at a relatively aggressive rate," said Crivelli, a board member with Blue Diamond Growers, a Sacramento-based cooperative that operates the world's largest almond plant in Salida.

He said volume in his orchards is fairly light for the nonpareil variety, which draws the best prices, but heavier for other varieties.

Growers generally welcomed the reduced 2009 harvest because it helped bring down inventories that had caused prices to plunge to about $1 a pound early last year, below the cost of growing the nuts. This year, they hope for an increased crop to meet the demand growth that has coincided with the improved global economy.

Fisher said about 1.55 billion pounds of almonds are expected to be shipped this year to meet a worldwide appetite that has annually increased an average of 9.4 percent over the last 10 years.

"Overall (the forecast) gives a good, positive, stabilizing number," he said. "We need that kind of number to maintain the huge markets we've developed over the years."

Bee staff writer John Holland contributed to this report.

Bee staff writer Marijke Rowland can be reached at mrowland@modbee.com or 578-2284.

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