Business & Real Estate

Almond growers say industry adds $11 billion to California economy

An almond orchard is in full bloom along Ward Road in Patterson on the west side of Stanislaus County in March 2013.
An almond orchard is in full bloom along Ward Road in Patterson on the west side of Stanislaus County in March 2013. Modesto Bee file

Almonds have become California agriculture’s super crop in recent years. Now the state’s almond industry, facing scrutiny over its water usage in a time of drought, is making a statement about the industry’s contribution to the state’s economy.

A report released Tuesday by the Almond Board of California says the industry contributes about $11 billion a year to the state’s gross domestic product. The figure includes production of the crop itself and the processing and marketing of the nuts. The study, by the Agricultural Issues Center at UC Davis, says almond-related activities generate 104,000 jobs statewide.

The report is the first of its kind for the California almond industry. Richard Waycott, president and chief executive of the Almond Board, said the study wasn’t commissioned with the drought in mind, but he acknowledged that the statistical findings could contribute to the debate over water allocations.

It’s important for legislators, regulators and policyholders to “recognize what the economic engine is that the almond industry represents,” Waycott said. The report was released as the industry kicked off its annual three-day conference at the Sacramento Convention Center.

Almond growing has become an increasingly important sector of California’s farm economy in recent years, and almonds are the state’s leading agricultural export. The amount of California land devoted to almonds has nearly doubled in the past 20 years, to more than 900,000 acres, as worldwide demand has soared. California accounts for 99 percent of the U.S. almond crop.

But the growth has been accompanied by some controversy. Some environmental groups have criticized growers for expanding their orchards during the drought. They argue that farmers have put additional stress on the state’s overtaxed water system by planting almond trees, which, unlike field crops, can’t be fallowed in dry years. The problem is worsened, environmentalists say, because almonds are fairly thirsty compared to many other crops.

Almond growers say they’re simply doing what makes economic sense by using their scarce water allocations to produce a crop that creates maximum value. Economist Daniel Sumner, director of the UC Davis center and the study’s author, said farmers aren’t deliberately planting orchards in regions with unstable water supplies.

“Every day in California agriculture, water is the No. 1 issue on everybody’s mind,” Sumner said at a news conference unveiling the report. “These guys aren’t dummies. The first thing they’re thinking about before you plant a tree is to have some source of water.”

The state’s almond crop alone has been estimated at around $4.3 billion a year by state and federal agricultural officials. When other activities are thrown in, including processing and manufacturing of almond-based products, the contribution to the California economy grows to around $11 billion, the report said. The figure includes so-called induced economic effects, such as the impact of dollars spent in the economy by farmworkers and others in the business.

Of the estimated 104,000 jobs generated by the industry, the report said 97,000 are in the Central Valley. The bulk of the crop is grown in the San Joaquin Valley, but considerable acreage is found in the Sacramento Valley, too. Sacramento is home to Blue Diamond Growers, a global powerhouse in the almond business.

“Where almonds are grown, we create jobs and we create economic value,” Waycott said.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

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