Over the past decade, the almond sector in California has seen a significant expansion, with both growers and investment entities extensively investing in new orchards. However, the industry is currently experiencing a downturn, characterized by falling prices and a reduction in total almond acreage. This shift has led some growers to replace almond orchards with alternative crops. A notable indication of the industry's challenges is the bankruptcy of a prominent almond-growing conglomerate, Trinitas Farming, alongside its affiliates. The companies cited unprecedented low almond prices and elevated interest rates as key factors impacting their financial stability, as revealed in Chapter 11 filings with the federal bankruptcy court on February 19. The filings disclosed that Trinitas Farming operates 7,856 acres of almond orchards across five counties, including Solano, Contra Costa, San Joaquin, Fresno, and Tulare, all of which are anticipated to be sold as part of the bankruptcy process.
Jake Wenger, general manager of Salida Hulling Assn., highlighted the broader implications of the low almond prices, stating, "When the price is low, now we start seeing the results of it. And certainly the fear is that Trinitas is the tip of the iceberg." He noted that the price of premium almonds has halved from nearly $4 a pound a decade ago to about $2 a pound or less. This price decline has affected all growers, particularly investor groups who acquired land at peak prices and are now facing significant debts. Wenger expressed concerns over the potential actions of banks regarding these loans, pointing out the high financial risk faced by these investor groups.
Source: uk.finance.yahoo.com