Almonds are an export success story for the US – and for California in particular.
In fact, almonds are a leading US export crop, with about 30% going to domestic markets and 70% going to 90 countries around the world. Compare this to the approximately 20% of US production of fruits and nuts overall (HS08) that goes to exports. US almonds account for fully 80% of global supply – and California’s almond exports account for virtually all of it.
Blue Diamond, a cooperative formed in 1910 and currently owned by about half of California’s almond growers, has taken the lead in developing market demand for almonds in the US and overseas. “An agricultural juggernaut,” almonds have become a $4 billion industry and California’s No. 1 ag export in dollar terms in less than a decade, as Blue Diamond President and CEO Mark Jansen told the Sacramento Bee.
Multinational promotion and intensive product development drive the juggernaut. The Sacramento Bee story reports that Blue Diamond introduced 17 products last year and has landed a new deal to distribute Almond Breeze nondairy beverage in South Korea.
Our own data on the five years from 2009 to 2013 shows shelled almonds (HS 080212) climbing from No. 113 among US exports ranked by value to No. 66, with total exports of $3,208,803,977 (FOB value) last year. The top market for US shelled almonds is Hong Kong.
Unshelled almonds (HS 080211) ranked No. 429 in 2009 and No. 298 in 2013, with exports valued at $893,169,392. India is the leading market for these.
There are clouds on the horizon – or, rather, there aren’t, and that’s worrisome. Dry weather has slowed growth in almond export volume if not value. Compare the export value 5-year trend line above with this volume trend line:
A Blue Diamond market update projects shipments for the 2014 crop declining by nearly 10%. Our US census data for the last 13 months confirms export volumes slipping this September compared to the same month last year. October and November are the peak export months.
Our maritime export data for October indicates a continued decline in volumes shipped. Here’s a look at the changes in the top 15 markets for US almonds:
The slowdown reflects lagging production largely due to California’s ongoing drought. Because demand remains strong (with the exception of Russia), the shortfall in supply is boosting prices, and sustaining growers’ revenues – for now. But continued drought and emergency water restrictions may result in yet poorer crop yields, and buyers may start shopping for alternatives.
Based on wet weather forecasts, the California Department of Water Resources has projected an increased allocation of water in 2015. But the DWR cautions that the state’s reservoirs are too depleted to be filled by typical winter storms – California would need 150% of average precipitation to recover from this drought.