Almonds

Californias lucrative almond orchards face a reckoning with drought, climate change
Sac Bee
BY DALE KASLER
UPDATED SEPTEMBER 05, 2021 03:58 PM

Duration 2:16Fullscreen Joe Del Bosque has cut back on irrigating his almond crop due to high water costs and shortages, leaving him with a decision on whether to pull out his trees or take his chances. He talks about his choices on Aug. 12, 2021. BY CRAIG KOHLRUSS

FIREBAUGH First came the asparagus field. Then came the melons. And now Joe Del Bosque is considering the unthinkable: tearing out a sprawling almond orchard bursting with healthy, nut-producing trees.

Its a tough decision to pull out these orchards, said Del Bosque, who farms on the west side of the San Joaquin Valley. But what do you do? Were thinking of ways to survive.

Two decades of almost unrelenting growth vaulted almonds into the upper ranks of California agriculture. Now, though, the states $6 billion-a-year industry is being humbled by a devastating drought. Farmers have slowed the pace of new orchard plantings and, in a few cases, have plowed up trees still capable of bearing almonds.

That boom may be over for now, said Del Bosque, whos thinking of destroying 150 acres of almond trees this fall. The price of almonds is low; the price of water is high.

FRS_almonds2 A few immature almonds grow on a tree limb with withered leaves in an orchard at Joe Del Bosques Empresas Del Bosque farm in western Fresno County in August. Del Bosque says the inability to get enough water for his orchards has resulted in smaller almonds. CRAIG KOHLRUSS CKOHLRUSS@FRESNOBEE.COM To some critics in the environmental community, the end of the almond boom would represent a long-overdue reckoning for years of relentless planting.

Almonds are among the thirstiest of the 400-plus commodities grown in California. Theyre expensive investments: Planting an acre of almond trees can cost $8,500, compared to $4,500 for an acre of tomatoes. And unlike that tomato field, almond trees must be watered and cant be left fallow for a year because of water problems.

That means farmers are extremely reluctant to let trees go without water and it makes Californias adjustment to the drought harder. The problem is likely to worsen as climate change intensifies and the states groundwater law, designed to gradually curtail the amount of pumping from aquifers, takes hold.

The investment in permanent crops has hardened the demand for water and made it more difficult to cut back in dry years, said Peter Gleick, president emeritus of the Pacific Institute, a water policy think tank based in Oakland. Any farmer ripping out permanent crops now made a risky investment.

Some farmers, though, say theyre being made the scapegoat for a drought thats the result of poor policy decisions by the state including environmental policies that let much of Californias water flow to the ocean instead of capturing it for agriculture. The state hasnt built a major reservoir in more than 40 years, and its water management system must balance water use with protecting Chinook salmon and other endangered fish species.

Its not that we have a lack of rainfall; we have a mismanagement of our resources, said Garrett Fowler of Fowler Brothers Farming, a management and consulting company based in eastern Stanislaus County.

Farmers up and down the state are considering abandoning water-heavy crops in favor of ones such as agave for tequila or solar panels. Fowler said one of his clients plans to rip out an almond orchard in Fresno County later this year, in large part because of water shortages.

Were feeding a lot of the world, he said. If we dont have water, we cant grow. If we take away that water, our economies will also be evaporated.

MOST RECEIVING NO WATER

Del Bosque has already seen what water shortages mean for his corner of the San Joaquin Valley. Hes trimmed his workforce by around 100 employees after cutting back his production of asparagus and melons. Leveling one of his almond orchards will worsen the situation.

You know their faces, you know they have families, he said of his employees. Thats what hurts.

Del Bosque, 72, runs a relatively modest farm operation of about 2,000 acres but is one of the most well-known growers in the Valley. His prominence hasnt brought him a single extra drop of water, though.

02_detail_small_FRS_almonds3 Farmer Joe Del Bosque holds an almond and its shell from a tree on his Empresas Del Bosque farm in western Fresno County on Aug. 12. Del Bosque says the inability to get enough water for his orchards has resulted in smaller almonds. CRAIG KOHLRUSS CKOHLRUSS@FRESNOBEE.COM

He belongs to the San Luis Water District, which gets its water from the federal governments Central Valley Project. Normally, he uses upwards of 2,000 acre-feet of water annually.

In this drought year, the federal projects allocation to most farmers is zero. Theres no groundwater where Del Bosque farms, so he has arranged to buy water from irrigation districts north of the Sacramento-San Joaquin Delta, the estuary that serves as the hub of Californias water-delivery system. The price: $750 per acre-foot. Compare that with the $250 he paid last year for Central Valley Project water.

The trouble is that a few hundred acre-feet of that water is being held up, hes told, in Lake Shasta, at the northern terminus of the federal system. The federal Bureau of Reclamation is holding as much water as it can in Shasta this summer in a desperate effort to preserve a decent-sized pool of cold water in the giant reservoir. The aim is to prevent much of this years juvenile winter-run Chinook salmon from cooking to death in the warm waters of the Sacramento River.

Which leaves a 150-acre orchard at Del Bosques farm in limbo. Its 21 years old and probably has two or three years worth of productive life left. The trees have already taken a beating this year he cut their water supply by about a quarter and the nuts are smaller than they should be. This fall will be crunch time: If he wants the trees to produce a crop in 2022, they need to be watered this fall, after this years harvest.

If the water arrives from Shasta, hes likely to keep the orchard alive. But Del Bosque is already speaking of the orchard in the past tense, as if its highly doubtful the water will get delivered and the trees will survive.

These things were still producing, could have gone another two or three years, he said, examining some nuts that had fallen to the ground. Weve already taken out our asparagus fields; weve cut back on our melons. Whats next? This is probably next.

HOW ALMONDS TOOK OVER THE VALLEY

Its hard to overstate how much the almond business has grown in California. Plantings have exploded in this century, driven by a strong marketing push, favorable news on health and nutrition, and the growing appetite for specialty products such as almond milk. The seeming insatiable international demand didnt hurt, either: Almonds, not cheese or Californias fabled wines, are the states leading agricultural export, with most of the product going to the European Union, India and China.

Fifteen years ago, almonds took up about 600,000 acres of California farmland. During much of the 2010s, bolstered by an expanding export market and prices that for a while surpassed $4 a pound, new orchards sprouted all over the Central Valley. Less valuable commodities, such as cotton, have faded in recent years from the Valley landscape.

This year, the U.S. Department of Agriculture estimates that almonds occupy 1.3 million acres of California land. Thats more than 14% of all the irrigated farmland in the state. More than 7,600 farmers in California grow almonds.

When you have high prices, everybody wants to be an almond farmer, Fowler said. Almonds are the second-largest farm commodity in California, trailing only the dairy industry.

04_FRS_almonds6 A drone image shows almond trees growing into the distance near the Del Bosque farm in western Fresno County earlier this month. Joe Del Bosque and other almond farmers in the area worry about the high cost of water and smaller water allocations. Some have decided to remove their trees. CRAIG KOHLRUSS CKOHLRUSS@FRESNOBEE.COM But when the rains halted in 2014, almond farmers became the poster boys of the last drought.

A 2015 story in Mother Jones magazine generated enormous amounts of negative attention. Among the storys revelations: It took a gallon of water to produce one almond more than three times what was needed for a grape, for instance.

Gleick said its true almonds require lots of water. Analysis by the Pacific Institute in 2015 showed that almonds required 4 to 5 acre-feet of water for every acre grown, making them among the most water-intensive of crops. Tomatoes and rice needed about half as much. An acre-foot is 326,000 gallons.

But almonds also generate, per gallon, lots of revenue.

By some measures, almonds are very thirsty, the Pacific Institute expert said. Water required per acre, theyre right up there. But water required per dollar of revenue produced, they actually look a lot better. And thats what farmers are looking at, return on the investment of a gallon of water. And by that measure, almonds are better than a lot of crops.

Almond economics took a hit four years ago, partly because of the drought-busting rains of 2017. Farmers who were receiving nearly $5 a pound saw prices fall to the $3 range in a few months.

Last year, average prices paid to growers fell below $2, said Michael Easterbrook of Stratamarkets, a Texas-based commodity market research firm. Prices were still weak until a few months ago, when they started creeping up as drought fears sparked speculation about a smaller crop. Then, in mid-July, the USDA predicted that this years crop would come in at just 2.8 billion pounds, a fairly steep drop from the 3.2 billion pounds forecast three months earlier.

While still the second-largest crop ever, the new forecast reinforced the idea that almonds wont be as plentiful. Easterbrook said growers can now expect to be paid more than $2.50 a pound, on average.

Thats if theyre willing to sell. Many are holding back supply on the expectation of a bigger payday down the road, he said.

Sellers recently anticipate that drought conditions are going to continue to drive prices higher.

A DIFFICULT DECISION

Stuart Woolf isnt interested in hearing environmentalists complain about almonds. A farmer in Huron, western Fresno County, he believes hes made responsible, rational decisions about planting crops that enjoy the highest rate of return per acre-foot of water. That includes almonds, which take up about 15% of his land.

But he understands the almond business of 2021 isnt what it was a decade ago.

Woolf, president of Woolf Farming and Processing, spent the early spring wrestling with a difficult decision. About 400 acres of almond trees at the western edge of his ranch were short of water. They were only 15 years old and could normally expect to have several good growing years left. But they had contracted a disease that would hinder production.

They were already beyond their peak, he said.

03_IMG_1559.jpeg Stuart Woolf, president of Woolf Farming and Processing, examines a large pile of wood chips the remnants of a 400-acre almond orchard that was ripped out this spring near Huron in Fresno County on Aug. 12. Dale Kasler DKASLER@SACBEE.COM With prices still below $2 a pound, did it make sense to spend as much as $1 million scouring up the water needed to squeeze out another years crop?

After considerable debate with his staff, the decision was made to sacrifice the trees. The orchard was destroyed, and the water was used instead on tomatoes, which were fetching a better price at the time.

Since then, almond prices have improved, but Woolf said, Heres the deal with farming: You never look back.

Almond farming is expensive. A new orchard can cost upwards of $11,000 per acre in its first two years before a single marketable almond can be harvested according to UC Davis estimates. By the time the orchard reaches full production, usually in the sixth year, the farmer has poured almost $19,000 into each acre, said Daniel Sumner, a UC Davis economist.

Woolf Farming is family-owned but is hardly a mom-and-pop operation. Stuart Woolf does business dressed in jeans and a crisp, white buttoned-down shirt. His operation is large, diversified and vertically integrated, with 20,000 acres of almonds, pistachios, grapes and other commodities at the home ranch straddling Interstate 5 in Huron and another 10,000 acres scattered all around the Central Valley. It still has hundreds of acres of almonds.

The company owns two processing plants, one for almonds and one for tomatoes, and has the wherewithal to dabble in experimental crops. It recently planted a two acres of agave, with the idea of selling it to a tequila distiller. There are plans to lease a portion of its land to an investor who will build solar panels.

For all that, though, tearing out the almond trees took an emotional toll.

You develop a real bond for the land and the crop on it, and then to pull something out prematurely, its kind of brutal, said Woolf, 62. Its like losing the family dog.

IMG_1584.jpeg Stuart Woolf, president of Woolf Farming and Processing, examines almonds clinging to the branches of felled trees awaiting the wood chipper on Aug. 12 at his former orchard near Huron in Fresno County. Dale Kasler DKASLER@SACBEE.COM

WILL MORE ORCHARDS GO?

Land IQ, a Sacramento farming consultant, has estimated that 47,803 acres of almond trees have been pulled out of the ground so far this year. While thats just a sliver of the 1.3 million acres of almonds, the tearing up of almond trees isnt done. By years end, there will be more than that, said Joel Kimmelshue, the firms owner and principal scientist.

What isnt clear is how many of those trees are being removed because of water shortages or simply due to old age. Fowler, the farm manager from Stanislaus County, said some trees are being replaced with new almond orchards. Some are giving way to pistachios also a permanent crop that, like almonds, cant be allowed to remain fallow but is better able to tolerate the salty irrigation water thats common in some parts of the Valley.

But many of the forsaken almond orchards will be replaced with annual row crops or left to lie fallow for the foreseeable future. Industry leaders acknowledge that Californias difficult water conditions could lead to the shrinkage of almonds footprint.

Farmers are incredibly resilient and have to adapt, said Richard Waycott, president of the Almond Board of California, the industrys trade association. For some growers, the drought could well be the trigger that causes them ... to repurpose land.

The long-term outlook isnt great, either. The Sustainable Groundwater Management Act will force growers of all crops to curtail their groundwater pumping over the next 20 years, Waycott said.

But he said the almond industry wont shrivel up and die. Water shortages notwithstanding, Californias climate is ideal for growing almonds; the state accounts for three-quarters of all the worlds almonds.

There are very few places where almonds can grow well, and California is one of them, Waycott said.

Will the California industry grow? UC Davis economist Sumner said its unlikely in an era of water scarcity.

Theres no huge incentive to be expanding almond orchards, Sumner said.

Back in Huron, Woolfs former almond orchard is a sad sight. Most of the trees have been ground up, leaving enormous piles of wood chips and nuts. A few clumps of trees lie on the ground, uprooted but not yet fed into the wood chipper. At some point, maybe in a year or two, Woolf will likely plant a row crop not permanent trees on the land.