Last year was a very good year for California almond production. 82% of the world’s supply of almonds was produced by the state’s 3,500 growers and exports topped 1 billion pounds for a fourth consecutive year. The top five markets were China, Spain, India, Germany, and the United Arab Emirates; and demand continues to surge. China, Russia, India, and South Korea have all been identified by the Almond Board as being major emerging almond markets. In 2008 the average American consumed 1.3 pounds of almonds per year and by 2012 consumption increased by 36% to 1.8 pounds per year. The majority of California’s almond orchards are situated in counties that are considered to be in ‘extreme drought’ and the California State Water Project has dedicated zero water to agriculture for the year leaving orchards to depend entirely upon groundwater. Growers are sacrificing trees; often trees with years of commercial production left to them. Some of the state’s 106 almond handlers have reserves they can turn to in times of shortages, but there is no strategic reserve for the industry – and for investors there is no almond futures market as there is for corn, coffee, sugar, or wheat through which to hedge against shortages. Because of last year’s successful crop almond consumers will likely not be too greatly affected by the drought this year, but the market will be significantly affected in 2015 when this year’s crop goes to market.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free bi-weekly enhanced eNews service