California’s nut boom defies gravity |

Tyler Christensen’s family has been growing plums for prunes for five generations, and his dryer is used by prune producers from throughout the region.

But the 37-year-old farmer recognizes which direction the trade winds are blowing.

Now Christensen, whose 1,000 acres of orchards line Highway 99 on the outskirts of town, is climbing aboard the Golden State’s nut bandwagon. He has doubled the size of his walnut orchard in the past four years, from 200 to 400 acres.

“Obviously, we’ve been having some really good luck” with walnuts, he said. “We’ve had good growing success and good economic success. Those have been the big factors.”

Christensen also has about 130 acres of almond trees. But this far north in the Sacramento Valley, the land and conditions are more conducive to walnuts, he said.

“Our county is really beneficial for walnut growth,” he said. “In the almond industry, we can barely set the state average, but with walnuts we can set record crops.”

Christensen is one of many California producers who are reaping the benefits of a veritable nut boom, as burgeoning global demand, ideal growing conditions and the misfortunes of other crops and other regions have fueled a steep rise in profitability for almonds, walnuts and pistachios.

Nuts booming

The production, bearing acres, prices and total value of walnuts and almonds have been rapidly growing for the past two decades — particularly since 2005, according to the USDA’s National Agricultural Statistics Service.

Bearing almond acreage has nearly doubled, from 418,000 acres in 1995 to 810,000 acres this year, NASS reported. Production during that period has jumped from 370 million pounds to an anticipated 2 billion pounds this year.

While the price per pound has remained relatively stable, the total production value for the Golden State’s almonds ballooned from $881 million in 1995 to $4.1 billion last year, according to handlers’ reports to the California Almond Commission.

Walnut acreage has been trending gradually upward since 1988, from 177,000 acres then to 245,000 for last year’s harvest, NASS reported. However, production has more than doubled during that time, and the total crop value has jumped from $193 million 25 years ago to $1.3 billion in 2011, the government reported.

Pistachios are a rising star among nuts, with about 153,000 bearing acres in California. Last year’s roughly 550 million-pound pistachio crop dwarfed the 355 million pounds produced in 2009, according to the Fresno-based American Pistachio Growers. The 2012 crop was valued at $1.1 billion, up sharply from $879 million in 2011, NASS reported.

No one can say with any specificity when these sharp upward trends will show signs of easing.

“The way I view that is if anybody claims to really know, you’d better grab your wallet because they’re up to something,” said Daniel Sumner, an economist and director of the Agricultural Issues Center at the University of California-Davis.

“Very reasonable people have been saying for a decade this almond thing can’t continue,” Sumner said. “They weren’t silly for saying it, but they were wrong.”

Growing demand

Most industry representatives say the boom is driven by an expanding middle class in places like China and India, where consumers are becoming more health-conscious and have the money to improve their diets.

“Health is still the driving force,” said California Walnut Commission CEO Dennis Balint, referring to studies in recent years that show regular consumption of walnuts can reduce disease risks and even aid male fertility.

Indeed, in a 2011 U.S. market study, the commission found that 86 percent of consumers believed walnuts are healthful and 61 percent said they were buying more than they were five years ago.

The perceived health benefits are a big reason the Almond Board of California sees a potential to sell 200 million pounds more almonds per year by 2016, associate director of agricultural affairs Robert Curtis said in December. China and India consume nearly 300 million pounds of almonds a year already, and there’s a potential to sell them another 375 million pounds as those countries urbanize and develop more Western tastes, he said.

Meanwhile, pistachios are known as the “happy nut” in China, which purchases 20 percent of the American crop.

“Primarily where the growth is coming is Chinese growth,” said Veronica Nigh, an American Farm Bureau Federation economist in Washington, D.C. “China is the world’s largest importer of tree nuts and the U.S. happens to be the largest exporter. … A lot of that is the market demand has increased in tandem with local consumers’ understanding of the nutritional benefits of tree nut consumption.”

Ideal conditions

While demand is ultimately the key to the success of any crop, other factors contribute to the profitability of nuts from California. For one thing, California has some of the most suitable soil and weather in the world, experts say.

“California is certainly the best place in the world to grow almonds,” said Brooke Jacobs, who runs the Fruit and Nut Research and Information Center at UC-Davis.

A farmer needs three things to be successful with nuts — good ground, plentiful water and optimal water, explained Roger Duncan, a UC Cooperative Extension pomology farm advisor in Modesto. There needs to be very little rain from April through October, and a low probability of frost in March and April, Duncan said.

“I’ve gone to Europe and other places now, and it just really impresses upon me that what we have here is really unique,” he said. “When I grew up here, I assumed the whole world was like this. It just isn’t.”

In many places around the world, soil is very shallow or contains high amounts of alkali, Duncan said. The Central Valley’s deep, alluvial soils allow for larger, more vigorous trees that supply nuts in high quantities as well as quality, he said.

On Christensen’s farm one recent morning, Howard walnut trees had become so full that workers were cutting and hauling away branches that were in danger of being ripped away from trees because of their weight. Christensen said it used to bother him to see piles of abandoned branches on the ground, but he got used to it.

“I’ve seen trees peel just like a banana,” he said.

Advances in irrigation efficiency and other growing techniques have helped California orchardists further bolster production. Last year, the Golden State’s almond growers produced 2,390 pounds per acre, up from 885 pounds per acre in 1995, according to NASS. In the same period, walnut production per acre has increased from 1.21 tons to 1.92 tons, the agency reported.

The yield increases have helped growers meet the burgeoning demand while keeping prices affordable, Sumner said.

“The biggest story is yields have gone up like crazy as efficiency of production has gone up,” he said.

Others’ misfortunes

California’s growing conditions and efficiencies have enabled the industries to gain a strong reputation around the world for food safety, Sumner and other experts say.

The U.S. has gained a trade advantage over Iranian pistachios, for instance, because growers there bleach their shells with hydrogen peroxide to make them as white as California’s, Nigh said.

The European Union purchased more pistachios from Iran than California about 20 years ago, Sumner said. But now California has surpassed its competitor.

Further driving California’s nut production are the misfortunes of other crops, which have encouraged many farmers like Christensen to switch. For instance, as a global glut of prunes has lingered, plum acreage for prunes has dropped to an estimated 51,000 this year, down from a peak of 86,000 acres in 2000.

“Prunes have just not been that profitable,” Christensen said.

In Stanislaus County, Duncan is contacted almost daily by growers sending him soil and water tests so they can determine if they can grow almonds, he said. He’s spoken to many row crop producers on the west side of the valley whose long-term plan is to rotate out of tomatoes and beans and go into permanent crops such as nuts, he said.

“We may not be opening up new ground (for nuts), but we could be converting used ground,” Duncan said. “How long will that continue? If the market stays the way it is now, it’ll continue until the market can’t absorb any more. From what we’ve seen, the market can absorb a lot more walnuts, almonds and pistachios.”

Room to grow

The walnut commission’s Balint believes the U.S. has only realized about 25 percent of its potential for marketing walnuts globally. Processors have built new facilities or expanded existing ones in the last few years, bringing California’s total to 88.

“Ten years ago, we probably had 50,” he said. “So the increase in the number of handlers along with the increased capacity of the old handlers means that in the foreseeable future, I don’t think there’s going to be a lack of production capacity. If there’s a problem, it’s huller capacity.”

The AFBF’s Nigh expects California’s nut boom to last at least another five years.

“I don’t see any reason for that to be dampened,” she said. “There’s really strong consumer trends supporting the growth. There’s increased acknowledgment of the health benefits of tree nuts, and that’s not going away. I don’t see any lurking limitations to an increase in demand over the next several years.”

But for his part, Christensen is more cautious. He’s mindful that California’s prune growers are still trying to recover from a dip in grower returns stemming from a busted crop in 2004 that ate into their worldwide market share. He noted that much of California’s success is tied to a weak dollar that makes American walnuts more attractive overseas, where 60 percent of the crop is sent.

“The scary part is the industry has staged itself for another 15 years of record crops ahead of us,” Christensen said. “In that situation, all of our markets have to fire on all eight cylinders.”

While many growers have paid large sums for land, Christensen has avoided taking on new debt, he said.

“We’re just trying to be prepared for whatever occurs,” he said. “Agriculture is like anything — history repeats itself. It’s just a matter of when.”


California Walnut Commission:

Almond Board of California:

American Pistachio Growers:

UC-Davis Fruit and Nut Research and Information Center:


Blue Diamond and SMUD Celebrate Energy Makeover

Blue Diamond and SMUD Celebrate Energy Makeover
Targeted News Service — SACRAMENTO, CA — May 16, 2013 — Blue Diamond Growers and SMUD have partnered on high-tech energy efficiency installations totaling nearly $500,000 in energy efficiency incentives. Blue Diamond and SMUD recently completed four major energy efficiency projects at the cooperative’s downtown Sacramento headquarters. Three areas in the Blue Diamond plant totaling 588,000 square feet (on 90 acres) were retrofitted with energy-efficient LED technology. Most of the $474,000 in incentives SMUD delivered came from a federal grant designed to help SMUD develop its smart grid.

For more than half of California almond growers who own the Blue Diamond cooperative, these measures deliver considerable energy savings to the growers’ return on investment, including a nine percent reduction in utility costs, energy consumption and demand equaling $1.1 million over five years.

For SMUD, the measures help reduce peak demand during summer months when power can be very costly. The energy reductions also deliver environmental and community benefits. Resulting greenhouse gas reductions are the equivalent of removing more than 1,200 passenger cars from the roadways.

The lighting features advanced controls including web-based software and occupancy sensors. Plant managers can now be more efficient by creating flexible lighting schedules with on and off and dimming capabilities for each light or circuit of lights using a web-based smart phone application.

Supported by SMUD incentives, Blue Diamond Growers also installed a new chiller that, in addition to being highly efficient, gives the plant flexibility to shut down refrigeration and coast through periods of high electrical demand and high energy costs.

The $474,000 incentive represents nearly half of the $960,187 project cost. SMUD plays an important role in attracting and keeping local manufacturing jobs. SMUD’s reliability and its rates, which are among the lowest in California, and the close relationships SMUD has fostered with business customers over the years are key factors in local economic development.

An important aspect of the project to consider is SMUD ratepayer dollars are not funding the projects. About two thirds of the funding came from the federal government in a grant awarded in 2009 that is intended to help SMUD develop its smart grid. The balance of the funding comes from public good sources, money SMUD gets from the state and spends on programs designed to save energy. The projects are an investment with tremendous return as it helps SMUD trim energy use grid-wide.

In a ceremony held at Blue Diamond’s visitor center at its Sacramento headquarters, executives and employees of Blue Diamond Growers and SMUD celebrated the energy efficiency upgrades. “We’re particularly eager to work with businesses that promote energy efficiency and share a commitment to improving the regional environment,” said Frankie McDermott, director SMUD Customer Services. “Energy costs are a significant part of their operating expenses, so the incentives and expertise we contribute are vital in furthering not only our energy efficiency objectives but our economic development goals as well,” said McDermott.

Following the celebration, the group, along with news media who covered the event, took a tour of the plant facilities to see the new energy-saving measures in action that will deliver considerable bottom-line energy savings.

“The savings that Blue Diamond received goes back into helping us to invest and continue to grow here in Sacramento, creating new jobs,” said Mark Jansen, Blue Diamond president and CEO. “It also goes back into the almond-producing communities in the Central Valley of California, helping to spur economic growth in those areas as well.”

Blue Diamond Growers is a global food company that markets and processes its owners’ almonds at the world’s largest plant in Sacramento (90 acres). The cooperative created the almond industry in 1910 at an organizational meeting of 230 enterprising almond growers on J Street in Sacramento. Global almond product innovation has doubled Blue Diamond revenues in three years to over $1 billion in sales. Record U.S. almond shipments are directly attributable to the company’s investment in new almond uses. Blue Diamond’s research and development team recently opened the Almond Innovation Center to create new almond products with global food companies and Blue Diamond marketing experts.

The 2-billion pound California almond crop is valued at $6 billion and generates nearly 50,000 jobs. New jobs and additional revenue will be returned to almond growing communities as production and value-added products continue to grow. Over 80 percent of the world’s supply is grown in California. Almonds are the state’s largest food export and the largest specialty crop export in America.


“This material is based upon work supported by the Department of Energy under Award Number OE0000214.”


“This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.”

(c) 2013 Targeted News Service

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B. regards

Felix (Kyung) Seo