Water Cuts Won’t Affect Thirsty Almonds; Growers Are Planting More of Them

Wednesday, April 22, 2015

Almonds have become the poster child for water slurping California crops in the age of drought, although it is only the second-thirstiest crop, behind the far less sexy alfalfa hay. The water used to grow a year’s worth of almonds would supply all of Los Angeles business and residential needs for three years.

But Governor Jerry Brown’s mandatory 25% water restrictions, which were revised on Saturday, only apply to non-agricultural users, like people, although farms account for 80% of the usage.

It’s still boom time for almond growers in the dusty Central Valley. According to the tease to a report from Vernon Crowder,‎ senior vice president and senior analyst for Rabobank’s Food & Agribusiness Research Advisory:    

“In spite of ongoing water concerns and high land costs, Rabobank expects California almond growers will continue to increase plantings and total production, leading to a rise of about 2 percent and 3.5 percent per annum, respectively, over the next decade.”

And the water shortage has only made things better. “Drought conditions and the stronger US dollar have increased the price of almonds for all buyers,” Crowder wrote.

It’s all about the money. Rising prices and increased demand have made planting the crop a no-brainer for any grower that can drill deep enough. And since a lot of the biggest owners are giant corporations, they have the resources and the inclination to suck the land dry.

Nearly three-quarters of the 6,500 almond farms in California are owned by families and fewer than half are less than 50 acres. But they aren’t the big producers driving the industry.

The largest almond grower, by far, is Paramount Farms. They have 50,000 total nut acreage (they grow some pistachios too), three times more than second-place South Valley Farms. It is owned by Roll Global, a private holding company with $2 billion in annual revenues that is controlled by Stewart and Lynda Resnick. Together, they ranked 393rd on the 2015 Forbes list of the richest billionaires in the world.

The Resnicks, heavyweight political donors, are less reliant on groundwater than most growers thanks to a water deal they struck in 1994 to take control of the Kern Water Bank, an underground water storage project begun by the state. It was turned over to Kern County, which then struck what some consider a sweetheart deal with a subsidiary of the Resnick empire that lets them store water in dry times.    

Myriad op-eds and favorable newspaper accounts are giving the almond growers’ side of the story. Longtime farmers of various all-American crops, like veggies and cotton, escaped low, uncertain returns on their investment by planting a healthy, tasty, immensely popular nut, thereby securing the future of the family farm while the infallible, invisible hand of the market guides agricultural policy.

The drought is for others to worry about, and Governor Brown is not one of them. The governor said he is against “a ‘Big Brother’ move” to determine who grows what. “Agriculture is an important pillar of California and I think we have to be very slow to be starting to pick” one crop over another.

By important, he means that the sector using 80% of the water, underpaying labor, poisoning the air and water with pesticides and thumbing its nose at the rest of the state, is responsible for 2% of California’s economy.    

California provides 80% of the world’s almonds and almost 99% for the nation, but to do so it uses 1 trillion gallons of water a year. A survey (pdf) released last September by the California Department of Food Agriculture (CDFA) and the National Agricultural Statistics Service (NASS) found that 79% of almond farmers that use surface water are receiving less than the year before.

But that has barely slowed them down. Fifty-two percent said they would be pumping more groundwater than the year before, 

The Rabobank report is behind a password-protected security wall, but Rob Wile at Fusion took a peak. Crowder predicts that almond production can continue its profitability through two or three more years of drought and that the only thing that can slow it is lower prices.

For now, “Nurseries report very little slowing in orders of new trees,” he writes. “There are reports from nurseries of more interest in planting in northern San Joaquin Valley, where water is more available compared to many areas in the southern San Joaquin Valley. Some nurseries also report more interest in almond varieties that tolerate saline water better or require fewer bees for pollination.”  

–Ken Broder


To Learn More:

Bank Predicts MORE Almond Plantings in California for the Foreseeable Future (by Rob Wile, Fusion)

California Almond Growers to Expand Orchards, Despite Drought (by Dale Kasler, Sacramento Bee)

California Goes Nuts (by Tom Philpott, Mother Jones)

Maybe Money Does Grow on Trees (by Vernon Crowder, Rabobank Food & Agribusiness Research and Advisory)

California Almond Growing Uses more than 1 Trillion Gallons of Water a Year (by Ken Broder, AllGov California)

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