Almond growers project a record crop forecast at 2.45 billion pounds for the 2018 season, up 7.9 percent from 2017’s crop yield. However, the booming crop faces uncertainty over possible retaliatory tariffs by China in response to President Donald Trump's trade policies.
The record forecast was released as part of the 2018 California Almond Objective Measurement Report from the USDA's National Agricultural Statistics Service on Thursday.
“There was a sign of relief that yes, in fact, the nuts are setting and we have a very marketable crop,” said Holly King, chair of the Almond Board of California.
Despite last year's record crop, the state’s largest agricultural export could be hurt by tariffs from China, if the nut's third-largest importer takes retaliatory measures against the tariffs issued by the Trump administration.
“We as growers are very concerned but the state should be as well,” said King, seeing as the crop generates 104,000 California jobs and injects $11 billion into the state economy, according to King.
Almond trees continue to dominate more agricultural real estate, having added 70,000 acres this harvest year to the 1,000,000 acres harvested in 2017, which yielded 2.27 billion pounds of almonds valued at $5.6 billion, according to the USDA report.
"As we head into harvest obviously these tariffs create a fair amount of uncertainty, King said. “The uncertainty that is hanging over the market makes it difficult to make commitments to contracts.”
California dominates the almond market, exporting 70 percent of almonds harvested, but the current trade spat with China threatens to further raise the tariffs on could levy a 50 percent tariff on imported almonds. This would make it potentially harder to compete with Australian almonds, the second largest exporter of the commodity who has a free trade agreement with China.
Despite the uncertain future of price, demand seems to be ever increasing, considering that 2017’s record crop is almost sold out, ahead of the normal selling rates.
“We are selling almond ahead of the way we can produce them,” King said
Almond growers rely on carryout, or a buffer of the previous year’s inventory, to meet market demand while harvest takes place, from August to October. King anticipates that this year's carryout inventory will be low.
"We are further sold out than we were last year,” said King, “That should have an upward pressure on prices.”