Almond growers have experienced one of their most challenging years in recent history.

Low global pricing, high production costs and a flat economy have all conspired against grower returns.

Almonds Australia chief executive Tim Jackson says when you add in ongoing concerns with pollination capacity due to the advent of varroa mite and looming changes that could impact water availability across the Murray Darling Basin, there has been much to cause concern.

Mr Jackson says despite all these headwinds, the Australian almond industry announced this year it had increased plantings to just over 62,400 tonnes Australia wide.

He says production projections of this growth will see the national crop potentially exceed 200,000 tonnes within the next 3-5 years – and northwest Victoria represents more than 50 per cent of those plantings.

Why have almond orchards grown so much in recent times?

“Growers keen to invest or stay in irrigated cropping still identify almonds as a viable option,” Mr Jackson says.

“The return per megalitre of water used puts almonds near the top of the tree based on long-term average returns,” he says.

“The business case stacks up in many ways. It is a non-perishable, high-value product managed in a highly mechanised manner and results in zero food waste. “However, right now there is heightened uncertainty around irrigated crops and the long term costs of water across the basin.

“Amendments to the Federal Water Act have placed buybacks on the table so it remains unclear what impact this will have on the price of water.”

Mr Jackson says growers who rely on the short-term market for irrigating their crops could be facing much higher average water bills.

He says the projected costs vary depending on who has assessed the long-term impacts, but the figures cited could significantly reduce viability if sustained over a prolonged period.

“While speculation of further plantings continues, there are also other new considerations that need to be taken in account,” Mr Jackson explains.

“As some recent entrants to the industry have discovered, it is one thing to grow almonds, it is whole other conversation around getting them processed and packed,” he says.

“Limited processing capacity, beehive availability and water availability remain significant considerations that deserve detailed investigation.

“The industry’s hulling and shelling capacity is being stretched and new entrants need to understand that simply storing harvested stockpiles on farm for longer before the hulling and shelling can occur, significantly enhances the risk of adverse quality outcomes and lower returns.

“The lessons learnt in California in recent times are that plantings across the state appear to have peaked and in the most recent orchard survey the almond footprint reduced for the first time in many years.

“The ongoing lower returns, high costs and reduced global demand has resulted in some their growers exiting the industry, some forced, some to move on to other crops.”

California represents 75 per cent of the world’s production, but while the Americans are reducing in size, increased plantings continue in Australia, Spain, Italy and Portugal continue despite many of the same challenges.

Striking a balance between supply and demand is the holy grail for all global commodities and while almonds are experiencing somewhat of a reset, the lessons to be learnt from California should not be lost on us.

Mr Jackson says while the long-term fundamentals around growing almonds in Australia remains positive, new entrants need to go in with eyes wide open. “Almonds are a high quality versatile healthy product that provides value from gate to plate, but right now the aforementioned variables on farm in Australia require new and intending entrants to proceed with caution and a strong understanding of the challenges they may face,” he says.