Is Two Billion Pounds Of Almonds Enough?
Since the National Agricultural Statistic Service (NASS) announced its May subjective estimate of 2 billion pounds for the 2012 crop, some are worried that it is too much. Only in the last five years has the almond industry grown beyond 1 billion pounds, but in this dynamic growth industry, with demand greater than ever, I believe 2 billion pounds is not enough.
California almond shipments continue to accelerate! Our industry is shipping 15 percent more almonds YTD compared with the multi-year trend of 13 percent annual growth. This year’s record crop supported the acceleration in sales growth with innovation absorbing the additional supply. Globally, there were nearly 2,000 new almond products launched last year — far more than any other tree nut. In addition to great taste and health benefits, consistency of supply, aggressive food safety strategies and the relative value of almonds for major food companies are driving new product preferences for almonds around the globe.
Almond production is at record levels, but barely keeping pace with demand growth. Incredibly, this year, California will successfully absorb a 400 million pound crop increase in a single year! With late harvests in 2010 and 2011, the almond industry learned that seven to eight weeks of carryout inventory on hand was insufficient to cover September and October demand. As a result, prices have consistently risen throughout the year.
If the 2012 crop is 2 billion pounds and demand growth falls to only 10 percent, our on-hand inventory will drop to unsupportable levels. We anticipate pricing for the 2012 crop will need to increase over 2011 to bring supply and demand into alignment.
Clearly, 2 billion pounds is not enough!