WCN April 2020 Draft E

Cost Categories as a Percentage of Total Operating Costs for Almond Production in the Northern San Joaquin Valley Using Micro-Sprinkler Irrigation,
2002, 2011 and 2019 (courtesy B. Goodrich.)
Continued from Page 36
While this will come as no surprise to
growers, more surprising, perhaps, is the
effect that rising land prices and interest
rates have had on overall costs over the
last three years. Between 2016 and 2019,
Goodrich reported, the assumed interest
rates jumped from 3.25 percent to 6
percent and average irrigated land values
increased an average of 8 percent. She
noted that growers should consider the
opportunity costs of farming the land,
versus leasing it or selling to reinvest, as
part of the cost analysis of doing business.
Higher establishment costs, including
ripping out old orchards, chipping and
shredding, planting and purchasing new
trees, have also increased. Shifts in production
practices were
part of this dynamic:
chipping and shredding
orchards, for instance, is
a more expensive alternative
to burning.
“With the cost of production increasing
over the last decade or so and the
relatively low almond prices right now,
net returns from almond production
have likely narrowed for many almond
producers,” Goodrich said.
Still, she noted, new almond orchards
continue to be planted, suggesting that
almonds remain a profitable crop of
choice compared to other options in
California’s Central Valley.
Comments about this article? We want
to hear from you. Feel free to email us at
article@jcsmarketinginc.com
A recent analysis reveals higher establishment costs have contributed
to higher overall costs for new almond orchards. (photo by M. Katz.)
38 West Coast Nut April 2020