Almond joy: Worldwide cravings keep the nut California's No. 1 cash crop

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Posted: Monday, January 27, 2014 12:00 am | Updated: 11:24 am, Tue Mar 25, 2014.

LOS ANGELES — One of California’s top ambassadors often comes lightly salted and travels in a vacuum-sealed can. Eat an almond anywhere in the world and chances are that it was grown in the Golden State.

California produces 82 percent of the globe’s almonds, harvesting about 800,000 acres of the tree nut across a 400-mile stretch from northern Tehama County to southern Kern County.

Fueling the boom is robust foreign demand, particularly from emerging consumer markets such as China and India, where the industry has been promoting almonds as a healthful snack.

About 70 percent of California’s almonds are sold overseas. That made the nut the No. 1 state agricultural export in 2012, at $2.5 billion. That’s 2½ times more than wine, the second-most-valuable California agricultural export, according to the U.S. Census Bureau.

“The U.S. is the 800-pound gorilla of the global almond industry,” said Karen Halliburton Barber, assistant vice president and senior analyst for produce at Rabobank, a leading agricultural lender. “They’re the dominant producer.”

The Almond Board of California forecasts that the state will harvest its third-largest crop this year at 1.85 billion pounds — slightly less than last year’s 1.88 billion pounds.

That’s more than three times what the state was producing in the late 1990s. Experts are optimistic that the industry can maintain that sort of volume in the coming years. Foreign demand is expected to increase. Competition should remain light. The main barriers to continued growth are access to land and tightening water supplies.

“We’ll run out of dirt and water before we run out of almond markets,” said Daniel Sumner, director of the Agricultural Issues Center at the University of California-Davis.

The biggest of those worries is water. Almonds are a relatively thirsty crop. California suffered its worst drought conditions in 90 years between last January and May, leaving reservoirs dangerously low and state water allocations to farmers well below historical averages, according to the Bureau of Reclamation. Stingy water supplies meant smaller almonds this year.

“Water is a huge challenge,” said Richard Waycott, chief executive of the Almond Board of California. The group has partnered with the University of California-Davis to promote a variety of water conservation plans using micro sprinklers and monitoring soil moisture.

Growers are harvesting more almonds and using less water per acre than in years past. But the sheer acreage of California’s almond industry means water will remain a concern.

Still, with almond prices nearly doubling in the past five years to $2.58 a pound, it’s little wonder that growers have been abandoning crops such as cotton and diligently planting almond trees. California has twice as much almond acreage as two decades ago. Meanwhile, cotton acreage has dwindled to about 400,000 acres from 1.3 million acres in the same period.

“It feels like almonds became rock stars overnight,” said Karen Ross, secretary of the Department of Food and Agriculture. “But they’ve been building in bits and pieces for years. I look at almonds as a great case study, because they were very strategic and willing to make long-term investments.”

Central to the plan are nutritional research and clever marketing. The Almond Board of California has funded studies, including an October report in the European Journal of Clinical Nutrition, showing that eating dry-roasted, lightly salted almonds could sate hunger without increasing body weight.

Almonds are a major part of the farming portfolio of Beverly Hills billionaires Lynda and Stewart Resnick, who own brands such as Wonderful Pistachios, Pom Wonderful pomegranate juice and Halos mandarin oranges.

“This is a natural place to grow almonds,” said Joe MacIlvaine, president of the Resnicks’ Paramount Farming Co. That means warm and dry weather almost year-round, and no frost during the crucial spring. In that season the $4.8 billion industry puts its faith in honeybees to pollinate the almond trees’ pink-and-white flowers.

Paramount hires beekeepers to deploy nearly 3 billion of the buzzing insects. That’s become more difficult and expensive with the mysterious loss of billions of bees since 2006, a phenomenon known as bee colony collapse disorder.

“Our crop is entirely dependent on them,” MacIlvaine said.

The company is building a packaging and roasting plant — part of plans to sell more of its almonds as a packaged snack. About 40 percent of its almonds are sold to major food companies such as Kellogg’s for such products as cereal.

Some of the nuts are also sold to China, where annual consumption of California almonds has more than doubled in the past five years to 208 million pounds, making it the crop’s top foreign destination.

What bodes well for the industry is that demand is also expanding in Europe and the United States, shielding it from dips in consumption in any one place, said Halliburton Barber of Rabobank.

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