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Almond Situation and Outlook
| Large production increases in the United States and Spain, the world’s two largest producers, coupled with large U.S. almond reserves, will increase world almond supplies 30 percent from last year. Increased almond production in the smaller producing countries is also contributing to record world supplies, which have resulted in depressed almond prices. U.S. almond prices have fallen 33 percent since 1996. Anticipation of large crops and record supplies for all tree nuts in most major producing countries is keeping all nut prices low, due to the ease with which nuts are substituted for others. Low nut prices are expected to encourage consumption and expand export demand. U.S. almond exports are forecast to increase 13 percent from last year, due to the larger output. |
United States
U.S. almond production in 1999/2000 is forecast at 376,500 metric tons, 60 percent above last season and 9 percent above the previous record crop in 1997/98. Total U.S. almond supplies in 1999/2000 are forecast at 418,300 tons, up 33 percent from the previous season, because of the record crop and the forecasted large increase in ending stocks. Due to two record crops over the past three years, almond prices have fallen approximately 33 percent from 1996/97 and are likely to continue falling in 1999/2000 due to this year’s big crop, large stocks, and increased almond acreage. The Almond Board of California has tried to stabilize falling prices by retaining large stocks. The United States produces approximately 75 percent of the world’s almonds.
In 1999/2000, U.S. almond exports are forecast at a record 208,200 tons, 13 percent above the previous year’s shipments, due to larger supplies. In 1998/99, shelled almonds, including prepared and preserved, accounted for 97 percent of total U.S. almond exports. Major buyers of U.S. shelled almonds were the European Union (primarily Germany, Spain, and the Netherlands), accounting for 64 percent and Asia (primarily, Japan and China) purchasing16 percent. Asia is the most significant importer of in-shell almonds, purchasing nearly 73 percent of U.S. in-shell exports.
With support from the Market Access Program, the U.S. almond industry expanded sales to include Australia and New Zealand, where Blue Diamond is marketing their new almond milk product. Expanding consumption is critical in selling the record crop, so marketing campaigns are focused on the message that almonds are a healthy way to snack. The consumer-oriented marketing strategy is aimed at Germany, France and the UK, and most of Asia.
Spain
Spain’s 1999/2000 almond production is forecast at 67,000 tons, a 123 percent increase compared to the previous season, due to favorable weather conditions. However, recent dry weather in southern Spain has affected the condition of almond trees, and rain during the fall of 1999 will be crucial to future almond productivity in that area, as less than 10 percent of almond acreage is irrigated.
Exports in 1999/2000 are forecast at 50,000 tons, 47 percent higher than last year, due to the larger crop. Other EU countries (Germany, France, and Italy) are the major destinations, representing about 90 percent of Spain’s export markets. Almond imports in 1999/2000 are forecast to decrease based on the expected larger crop. The United States continues to be the dominant foreign supplier of almonds to Spain, supplying an average of 80 percent of total Spanish almond imports, most of which go for processing.
While there is no price support program for tree nuts, the EU does have an improvement plan that is implemented in both Spain’s almond and hazelnut sectors. Up to 475 ECU/hectare can be provided to growers to plant improved, higher yielding varieties. EU producer organizations are concerned about the impending end of this program in 2000.
Italy
After three years of adverse weather conditions, almond production for 1999/2000 is forecast to rebound to17,000 tons, 89 percent higher than the previous year. Almond production in the medium- to long-term is projected to decline, due to reported uprooting of the oldest, least productive trees and no significant planting of new orchards. Domestic almond prices have declined dramatically in the past few months, dropping 37 percent to 5,000 lire/kilogram (USD $2.75). However, cheap almond prices are now favoring domestic consumption, with some users substituting almonds for other nuts. Over the past three years, imports grew in response to both decreasing domestic production and expanding consumption. However, in 1999/2000 they are forecast to decrease slightly from previous years, due to the large crop. Price competitiveness between the United States and Spain, Italy’s two main almond sources, will be key in determining which gains a larger share of the Italian market.
Greece
Total almond production in 1999/2000 is forecast at 14,550 tons, a 21 percent increase from last season, due to favorable weather conditions. Annual production is projected to remain constant at 15,000 for the next 3-5 years, given good weather conditions. Greece has the highest per capita consumption of nuts in the world and produces mainly to meet domestic demand. Consequently, exports consist only of excess nuts, which go primarily to other EU countries. Despite complaints about high production costs, grower prices are considered satisfactory. Almond consumption represents about 24 percent of total domestic nut consumption.
Turkey
In 1999/2000, almond production in Turkey is forecast at 13,000 tons, up 8 percent from the previous year. Consumption has been growing slowly, due to the abundant availability of the preferred hazelnuts, which are a close substitute for almonds. Almonds generally are consumed whole as a snack food, with limited amounts utilized in confectionary products. Trade is mainly restricted to border exchanges with neighboring countries.
The FAS Attache Report search engine contains detailed reports on Tree Nut Competition or Market Intelligence for 16 countries, including Spain, Italy, Greece, and Turkey. (For information on production and trade, contact Lisa Anderson at 202-720-5028. For information on marketing contact Ingrid Mohn at 202-720-5330.)
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