WCN Dec e

WEIGHING IN
ON ALMOND
PROFITABILITY
Growers weigh tough
decisions to continue
farming as costs
continue to rise.
By CECILIA PARSONS | Associate Editor
As growers near the break-even point, they said there is really no way to cut production
costs without sacrificing yields (all photos by Paul Ewing, RPAC.)
There is no doubt that production
costs per acre in tree nut farming
have cut into profit margins.
Rising labor and fuel costs are part
of the production cost increase, but
water availability and cost is ultimately
the deciding factor in almond profitability.
According to information on almond
production supplied by UCCE Orchard
Systems Advisor Franz Niederholzer,
since 2016, total cost per acre (at 2,200
pounds per acre) has gone from $3,890
to upwards of $4,000 per acre. While
almond prices have fluctuated since 2016,
they have garnered positive net returns
for most growers.
Water costs and availability vary
throughout the state, said CCA Bill
Brush. Water is the most critical input as
it determines crop production. Loss of
water and reduced water quality is causing
growers to make hard decisions on
farming individual blocks of trees.
Growers who see their surface water
deliveries cut can be forced to pump
groundwater or buy water, placing them
at the break-even point or even losing
money depending on market prices.
Paying higher prices for water to ensure
good yields is difficult when the market
demand is low. Brush said there is really
no way to cut production costs without
sacrificing yields.
“There is nothing to be saved. Cut
back on pollination, you lose yields.
Fungicides, fertilizers, they have a proven
benefit to yield and crop quality,” he said.
There may be a little money to be
saved here and there, he said, but the
number one cost in UC production cost
studies points to water.
In a 2019 report, the UC Agricultural
Issues Center reported water
costs will vary considerably depending
upon the irrigation district and, when
pumped, the pumping level, energy
costs and type of irrigation system.
Water costs may also change depending
on availability and ground water
regulations.
Their study for almonds in the
southern San Joaquin Valley assumed
100% ground water usage and availability.
An estimated cost of $22 per
acre-inch ($264 per acre-foot) is used.
A total of 52 acre-inches of water is
applied to a fifth leaf orchard March to
October. An additional six acre-inches
are applied in January to leach salts and
fill the soil profile. Costs for irrigation
were listed at $1,264 per acre.
Tough Decisions
RPAC partner and almond grower
Paul Ewing said the number one factor
in considering the profitability of an
almond orchard is the yields per acre.
But, the same numbers don’t hold true
for every almond growing region.
“If they have good water availability,
and prices are historically high, unlike
current prices, some growers might
hang on to a 1,500 pound producing
block a little longer. But, if water prices
are high and availability is an issue,
even a 2,200 pound block could get
pulled out,” Ewing said.
Tree count per acre is another
consideration on assessing profitability,
Ewing said.
It is important that the value of
the crop weighs on farming decisions.
Outside of water, there are not massive
24 West Coast Nut December 2021