California almond growers expect this year to produce another limb-breaking crop at 2.1 billion pounds, up 3% from last year. But industry officials aren't stressed about a glut of nuts -- their only worry may be not having enough.
Over the last several years, the world has gone nutty for California almonds, as consumers gobble up all the state produces. More than 70% of the state's crop is exported.
And despite concerns from some growers about overproducing, the sellers of California almonds aren't flinching at the huge crop estimated by the U.S. Department of Agriculture.
"Our only concern is on the supply side, we want to make sure we can keep up with demand," said Richard Waycott, president and CEO of the Modesto-based Almond Board of California. "We have had such incredible growth in virtually all of our markets around the world."
Exports to China, South Korea and the Middle East grew by double digits from August 2011 to May 2012. Overall, exports during that period were up 18% over the same period last year, with China and Hong Kong the largest export markets.
Helping to fuel California almond sales are stacks of research showing almonds are a healthy snack. Also a factor is the emerging middle class in countries such as China and Russia.
"These are foods that the average consumer did not have before," Waycott said. "And now that they can afford it, they are relishing the ability to buy them."
Having already made inroads in several major worldwide markets, the Almond Board is not resting on its laurels. This August, the board is setting its sights on untapped markets, including Brazil.
Waycott said Brazil has what the almond industry wants: an established middle class, familiarity with almonds and a large confectionery industry.
"There are 200 million people who we could be selling to," Waycott said.
Daniel Sumner, a professor of agricultural economics at the University of California at Davis, said that despite the already large output, California almonds still have tremendous potential for growth.
Statewide, there are 780,000 acres of almonds in production -- the fourth-largest crop in California, behind grapes, wheat and hay. Fresno County ranks as the third-largest producer in the state, behind Kern and Stanislaus counties.
"This is not like cotton or apples, where there is already a mature market for the product," Sumner said. "The average consumption of almonds worldwide is relatively puny, so as the industry gets more efficient and continues to market, there is going to be plenty of room to expand tree-nut consumption."
But some growers are somewhat skeptical about how the industry can sustain the current rate of growth.
Many remember 2009, when a struggling global economy and large almond crop caused a 30% drop in prices.
"I just hope this doesn't turn out like the housing market," said Madera almond grower Alex Lehman. "What we don't want to see is for the economy to crash and for people to stop buying."
Lehman farms several hundred acres of almonds, including a variety that requires fewer bees for pollination.
He farms nearly an equal share of grapes, pomegranates and almonds. And he says he is done planting almonds.
"I still see people planting like there is no tomorrow," Lehman said. "But I am going to ride it out with what I have."
North Valley almond processor Dave Long admits that back in the 1980s, he, too, was concerned the industry was getting too big.
"When we hit the 500-million-pound mark, I didn't think we were going to be able to sell the crop," said Long, owner of Hilltop Ranch in Ballico, just east of Turlock. "But look at us now. Over the last 10 years, we have seen compounded growth of nearly 10% each year."
At Blue Diamond Growers, the Sacramento-based almond cooperative, company officials say they, too, are embracing the record crop.
"We realize these are large crops, but the world is changing and we have [regions] like China, India and the Middle East that are consuming a lot more of our products," said Dave Baker, director of member relations at Blue Diamond. "And we want to be the ones supplying them."
