California Almond Industry

Clearly the domestic and international demand for almond consumption has kept the Almond industry in a golden age—maintaining its reign for over 10 years; all this has resulted in a tremendous surge and continued growth for the almond industry.

As previously stated Almonds are by far California's largest tree nut crop— with respect to dollar value as well as acreage; ranking at the top of US specialty crop export, and the top Ag export for California. California boasts over 6,000 almond growers responsible for producing the entire commercial supply and well over 99% of the worldwide export product. Regarding the overseas market, close to 80 countries currently import California grown almonds, thus making the U.S. the largest market for almonds—top 5 exports destinations being Spain, Germany, India, Japan (Asia) and the Netherlands.

Almonds have reigned as California's golden crop for the past 10 years. Fueled by strong domestic and overseas demand, the California almond industry's revenues have surged to $3.9 billion in 2011/12 from $740 million 10 years ago. Cash income for almonds in 2009: $2,293,380, 2010: $2,903,380 and finally in 2011: $3,866,880. Just to give an idea as to how the almond industry has flourished over the decades, in 1979 there were 343,000 acres with a yearly farm income of $267 million. With respect to Rank, acreage, production and value for almonds, they rank # 1 in the U.S, #2 in California, area harvested being 760.0 thousand acres with a total value of $3,866,880—harvesting season is from August 1st to October 31st. Over the same period, the nation's almond growers have doubled their production to 2 billion pounds annually.

While the above numbers are quite remarkable, the almond industry in California is not without its challenges and future concerns stemming from numerous economic forces. To discuss that further, I will outline specific details of the economics behind the industry. The agribusiness landscape of the almond industry as a whole operates in a pure competition or price taker market, as defined in our textbook—meaning all the industry players on the almond grid if you will, grow/produce, sell basically an identical product—along with a huge number of firms in business (more than 6,000 growers, over 100 handlers, and numerous brokers and traders), and each firm supplies only a small fraction of the total supply, keeping in mind that barriers to entry and exit are comparatively low. (I have charts here, need your input in class)

Historically speaking large growers such as "Blue Diamond" did in fact influence the market due to its large portion of the almond crop, but as the numbers of growers went down (once they left the co-op), and new growers and handlers entered the industry, undoubtedly the big company influence declined. Certainly the almond industry has its share of competition and or rivalry—even with its stronghold on production