77,000-acres of Thirsty New California Almond Orchards Planted Over Past Year

By Dan Bacher | October 30, 2016 |  

California growers expanded water-intensive almond orchards by 77,000 acres over the past year, continuing the increase in new acreage during one of the worst droughts in the state’s history. 

The expansion in acreage for almonds, as well as for walnuts, pistachios and other nut crops, took place as Governor Jerry Brown mandated that urban users statewide conserve water by 25 percent. 

The increase also occurred as massive state and federal water exports from the Sacramento-San Joaquin River Delta continued to drive Sacramento River winter-run Chinook salmon, Central Valley steelhead, Delta and longfin smelt and other fish species closer and closer to extinction. (www.dailykos.com/...)

In addition, the groundwater pumping during the drought to sustain increased nut tree acreage caused sections of the San Joaquin Valley to subside even further.

California nurseries have sold at least 14.51 million almond trees  since June 1, 2015, according to the 2016 California Almond Nursery Sales Report. Plantings from 2012 to 2016 were used to calculate an average trees per acre of 135, based on the Almond Acreage Survey,  

“Almost 108,000 acres of almonds have been planted since June 2015,” according to the USDA report. “A little over 71 percent of the total trees sold, 77,000 acres, are new almond orchard acres and 25 percent (27,000 acres) replaced existing almond orchards. The remaining trees sold replaced trees within existing almond orchards.”

California bearing almond acreage has increased from 442,000 to 900,000 from 1997 through June 2016, according to report figures. When you add the non-bearing almond acreage of 220,000, the total acreage comes to 1,120,000. 

Almonds use about 3.29 million acre-feet of water in a year, or about 9.5% of California’s agricultural water, based on findings from the California Almond Sustainability Program. (www.almonds.com/...)

During the latest drought from 2012 to 2015, the bearing acreage increased from 820,000 in 2012 to 890,000 in 2015, a total of 70,000 acres. The non-bearing acreage went from 110,000 in 2012 to 220,000, a total of 110,000 acres.

That’s a total of 180,000 acres in new almond tree acreage. When you add the 77,000 acres added over the past year, that amounts to a total of 257,000 acres.

Ironically, Rabobank N.A., an agricultural lending group, on October 25 released a report revealing that agricultural land prices in the Central Valley will decline by as much as 30 percent between now and the end of 2017, following several years of big increases. (www.rabobankamerica.com/...) 

“Agricultural land prices are giving back some of their increases, particularly in regions where tree-nut prices have had an impact on previously rising valuations,” said Roland Fumasi, a senior analyst with Rabobank’s FAR unit. “Nut prices have since plummeted from their highs in the past year to 18 months.”

Almond prices have declined by approximately 50 percent over the past year, spurring a drop in rural land values. For example, values for almond orchards in Tulare County are expected to drop from $34,500 in 2015 to $26,000 by the end of next year. That’s a decline of almost 25 percent. 

The report, “California Land Values: Outlook 2016,” analyzed USDA cropland values and rural land sales data from the American Society of Farm Managers and Rural Appraisers (ASFMRA). Rabobank also interviewed rural real estate appraisers, and used a set of econometric equations based on crop prices and macroeconomic variables to estimate likely changes in the average economic value of rural land in each California region.  

The report looked at agricultural land land values in the Sacramento Valley, San Joaquin Valley, North Coast, Central Coast and Southern California.

“Agricultural land values in the Sacramento Valley have soared in recent years compared to all other regions in the state,” according to Rabobank. “From 2010 to 2015, the region’s compound annual growth rate (CAGR) based on ASFMRA data was 18.2 percent, vastly higher than the CAGR of 5.0 percent between 1999 and 2010. The biggest increases were fueled in part by specialty crops including tree nuts, some of which are now experiencing significant price declines. Accordingly, falling walnut prices could drive some land values down 31 percent in 2016 and 15 percent in 2017.”

“Like its Sacramento Valley neighbor to the North, recent declines in tree nut prices are creating a general downward expectation. The severity of the drop will depend on the specific area of the valley, crop type and water access. Between 1999 and 2010, the valley’s agricultural land values rose at an average CAGR of 6.5 percent, and 15.5 percent between 2010 and 2015," Rabobank stated. 

For more information, go to: www.rabobankamerica.com/...

During the peak of the drought In March 2015, Stewart Resnick, Beverly Hills billionaire and the largest tree fruit grower in the world, revealed his efforts to expand pistachio, almond, and walnut acreage at the annual pistachio conference hosted by Paramount Farms (now renamed The Wonderful Company). 

At the event covered by the Western Farm Press, Resnick boasted about the increase in his nut acreage over the previous ten years, including a 118-percent increase for pistachios, a 47-percent increase for almonds, and a 30-percent increase for walnuts. (westernfarmpress.com/...)

Resnick and his wife, Lynda, have a huge impact on water supplies in California. The Resnicks use more water than every home in Los Angeles combined, according to Mother Jones magazine. (www.motherjones.com/...)

The Resnicks are among the most avid proponents of the governor’s California WaterFix, the new name for Brown’s controversial plan to build two giant water tunnels underneath the fragile Sacramento-San Joaquin River Delta — a project that conservationists, Tribal leaders, Delta farmers, fishermen and environmental justice advocates say will potentially be the most destructive public works project in California history.

The tunnels would divert water from the Sacramento River for export to agribusinesses on the arid west side of the San Joaquin Valley, Southern California water agencies, and oil companies that engage in fracking and other environmentally damaging oil extraction methods in Kern County. 

So let’s get this right — the Brown administration demanded that urban users slash their water use by 25 percent and sacrificed economically and ecologically valuable San Francisco Bay-Delta and ocean fisheries so that politically powerful billionaires like Stewart and Lynda Resnick could expand their acreage in almond and other nut crops to make themselves even wealthier?

Now the apparent saturation of the almond market fueled by agribusiness greed has spurred the drop in almond prices and the devaluation of Central Valley farm land.

Meanwhile, Governor Brown is relentlessly promoting the construction of his environmentally devastating “legacy” project, the Delta Tunnels plan, to export massive quantities of water to these growers and Southern California water agencies. You just can’t make this stuff up!