Almonds: heated debates on water

Date: 7th December 2022 Category: Latest News
Almonds: heated debates on water

Mundus Agri: Water, or rather the lack of it, continues to be a matter of heated debate in California. On Thursday, the Department of Water Resources announced an initial allocation of merely 5% of requested supplies for 2023. However, drought, high production costs, and low commodity prices affect not only almond farmers in California but also in Spain.

5% water allocation

Farmers responded with an immediate outcry to the initial allocation. As a local media report, the California Farm Bureau highlights that 23 million people are now confronted with another year of uncertainty and that California has failed to protect farms and people from water shortages. The Bureau emphasizes that a much more coherent plan is required, which comprises food production, consumer prices, and carbon reduction. California’s prolonged drought has forced farmers to make tough decisions in recent years, and the prospects for next year are far from encouraging.


The trouble is that the state has to take precautions for another dry and hot year. In so doing, the Department of Water Resources issues the initial State Water Project allocation on 1 December every year, thereby taking available water storage, estimated water supply, and demand into consideration. California has entered its wet season and normally receives half its rain and snow by the end of January. November was also relatively dry, and a fourth dry year with extreme drought conditions is looming on the horizon. The Department of Water Resources updates allocations monthly before setting a final allocation in May or June. While initial water allocations are usually low at this time of year as it is too early in the season for hydrologic forecasting, it should be noted that final water allocations were set at 5% in 2021 and 2022.


Price pressure in Spain

Farmers in Spain are facing similar problems. Although spring frosts, bad pollination, and drought have taken their toll on this year’s almond production, with suppliers even estimating that output may range up to 50% lower this year, prices are surprisingly low. According to Mundus Agri farmgate, prices for almonds range around 2-5% lower than last year for the main varieties. The trouble is that Spain imported large volumes of around 120,000 mt in 2021/22, mainly from the United States.


The US almond industry is also coming to terms with this year’s export performance. At 215 million pounds (97,522 mt) monthly shipments exceeded initial expectations of 200 million pounds (90,718 mt) in October, as the monthly position report issued by the Almond Board of California shows as shipments and sales for the season are only hovering at 38% of total supplies, whereas the five-year moving average ranges at 47%, there is a potential for further price reductions throughout the current season. The prices for US almonds have, however, risen in Spain this week, whereas the prices for Spanish varieties remain fixed for most varieties.