Blue Diamond Growers cuts costs, broadens reach in response to industry challenges
Blue Diamond Growers was buoyed by cost-cutting efforts in the most recent fiscal year, amid financial pressures that have weighed down sales for two consecutive years.
Revenues for the Sacramento-based company remained flat during the fiscal year that ended in August. Income rose slightly, as the cooperative moved to cut expenses.
“This year, amidst the challenges, Blue Diamond has fought for its members by tapping into every opportunity to strengthen our portfolio and increase demand for our almonds,” Board Chair Steve Van Duyn said in a news release.
Revenues were $1.3 billion, matching the previous year, and down 17% from the 2022 fiscal year. The Sacramento-based almond cooperative reported $711 million in income, up from $640 million in the previous fiscal year.
The organization eliminated 38 corporate jobs this spring, citing “significant challenges” in the previous fiscal year.
The cooperative has been pushing to expand its international footprint and grow its portfolio of products. It expanded its footprint in Canada, established a new distributor in the Middle East, and added new products in Europe.
The industry, in previous years, struggled with a large surplus induced by supply chain disruptions during the pandemic, said Rick Kushman, spokesperson for the Almond Board of California.
Due to financial hardships, some farmers have skimped on certain measures — like removing the almonds that stubbornly remain on trees during harvest — inducing some pest problems last year which, “hurt a little,” Kushman said. And in the almond business — where farms are often family-owned and often less than 100 acres — soaring interest rates took a toll.
California’s almond acreage has declined for three consecutive years, according to a report commissioned by the Almond Board of California.
Still, there are signs for optimism: The COVID-era surplus, Kushman said, has been reduced.
“It has gone down dramatically,” Kushman said. “Demand has been very consistent, and building.”
Beginning in 2020 and up until recently, almond prices have been “very choppy” but generally dragged down by large surpluses, said Michael Easterbrook, managing director of Stratamarkets, a firm that tracks tree nut commodity price data.
But over the past three-and-a-half months, as the industry entered a new growing season, prices have improved.
“It’s been a heavily-supplied market,” Easterbrook said. “That’s corrected itself a little bit this year.
”California entered the new season with much lower inventory, as did its major competitors in Europe, Asia and the Middle East. Almonds are a competitive industry, and prices tend to be volatile, Easterbrook said. Still, he added, “I would say the market feels fairly bullish right now.”
The U.S. Department of Agriculture forecast that the industry would harvest 2.8 billion pounds this year, up from 2.47 billion last year, due in part to favorable weather.
“What we know is, globally and domestically, demand continues to grow,” Kushman said. “Price has been slowly inching up… The industry has, in general, slowly started to climb back.”
This story was originally published November 25, 2024 at 2:56 PM.
