Trouble Shipping Out The Almonds

Supply chain woes:

“It’s all about money,” Phippen, 72, said, shaking his head in frustration on a recent hot and sticky morning. “After years of prospering together, foreign shipping vessels have decided to stop servicing us.”

Now, the powerhouse almond industry is in a pickle. Roughly 7,600 California farms produce 82% of the world’s almonds. But they don’t get paid until their product gets delivered in robust markets like the European Union, China, India and the United Arab Emirates.

As a result, the prospect of harvesting 2.8 billion pounds this year — just shy of the 2.9 billion pounds in 2021 and the record 3.1 billion pounds in 2020 — has industry leaders both excited and worried. That’s because about 1.3 billion pounds of unsold almonds are still sitting in piles at processing and packing facilities.

The problem comes at a time when inflation and a historic drought are pushing the costs of production and water supplies to an all-time high, and the price of almonds has fallen to an all-time low of about $2 per pound. It’s a sharp reversal for the industry after four decades of relentless expansion across 1.6 million acres in California’s agricultural Central Valley from Tehama County to southern Fresno County. 

“We’re running into a delivery and cash-flow crisis,” said Aubrey Bettencourt, chief executive of the Almond Alliance of California. “From last September to February, the almond industry lost $2 billion in value — that’s a lot of money that’s not going into our communities.” “If we can’t tackle this problem,” she added, “our products will be replaced with something else.”