Dave Phippen is more than just a simple almond farmer.
Make no mistake about it – the man knows his almonds.
This year alone he and his brother are getting ready to plant four new orchards and already he plans to add another one next year thanks to a booming trade and escalating prices that show no signs of slipping.
But if you ask him about how emerging markets in the Far East are affecting global prices he can tell about how international demand is affecting stateside business and talk for half-an-hour about how the willingness for certain countries to pay top dollar for California’s premium almonds are a symbol of how strong their economy is.
That’s just the way things work when your livelihood – and that of nearly everybody you know – rests in how much somebody is willing to pay for a tree nut not much bigger than a thumbnail.
And it’s not as easy life.
Most growers have to wait at least a decade after planting before they see any real profit on their initial investment, and that’s only if they’re growing on land that was gifted to them through family lineage. Buying land to plant on lengthens that stretch significantly.
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Almond orchards costs $2,600 acre a year to maintain
According to Phippen the average grower in California spends about $2,600-per-acre to produce almonds in a given year give or take a few hundred dollars. And the money, he said, started rolling out on Nov. 13.
Each tree needs to be pruned. Every acre needs to be fertilized. Just this week the bee man started dropping boxes – at the cost of $175 each – and it’ll be months, and in some instances years, before any sort of return comes back.
“Right now you rush through money like you wouldn’t believe,” he said. “It’s not that there isn’t a good return. There is. But you spend a lot long before you get there. It takes an investment to get to that point.”
California’s drought has added a whole different headache to growers who still have to rely on delivered water to keep thirsty trees satiated.
But that’s not the only thing that has been sending shockwaves through the Central Valley’s typically booming agricultural industry.
The work stoppage at all of the ports up and down the Pacific Seaboard is costing California farmers millions of dollars in export fees during the height of what would traditionally be the season for tending to the business side of the equation.
Phippen, who both grows and exports almonds overseas, has seen his warehouse east of Manteca and north of Ripon on Graves Road stack up as more and more boxes await shipment to the countries that help feed the breadbasket’s economy. Almonds happen to be California’s leading agricultural while the state grows 100 percent of the nation’s almonds and 80 percent of the world’s almonds.
“This has been disastrous for so many people in the agricultural community. This month we’ve exported 60 million pounds when we normally have double that – twice as many have been sold and we can’t get them on the ship and off the dock,” Phippen said. “If things continue as they are right now for every two months we’re going to lose a month – it’s a race against the clock. Our marketing year ends at the end of July and this is just horrible for the growers when we have a product that we’re trying to get market and can’t get the grower the returns on something that’s been in the works for more than a year.
“What really irritates me about it, whether it’s a strike or a non-strike, is that it affects so many different people – the truck drivers that couldn’t pick up the load and the people working for me at the packing operation. We’re going to run out of room to store things and have shut down for weeks. We’re not going to get that payroll back. I don’t know what their work strife is, but they’re all making over six figures and I know guys out here at the Port that are making $13 to $15-an-hour that are losing hours that they could have worked. It just doesn’t make sense.”
While preparing products for export is something that Phippen is well versed in, taking care of the crop at home is something he’s an expert at.
Whether it’s in casual conversation or as an industry spokesperson, Phippen can rattle off facts that sound on one end of sentence like the wisdom of an old farmer and a seasoned scientist on the other.
He has spent his entire life either working in, on or around an almond orchard and has seen the industry undergo some massive transformations during the time frame. Some of those, he said, still continue to this day.
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Domestic market keeps growing
“You look at Blue Diamond in particular and they’ve been a standout at developing new and innovative ways to market almonds. They keep coming up with new and innovative flavors – gluten-free crackers and almond-milk for people who are lactose intolerant – that help in what we consider the United States to be which is a ‘mature’ market,” Phippen said. “We always think that the U.S. is maxed out but it’s not – the Almond Board, which works on behalf of the growers, continues to try and fuel and excite and they’re doing a good job at it. People question why we spend 75 percent of our budget advertising here in America when we export 75 percent of the crop, but we’re getting better bang for our buck here in America.
“Every year we’re exceeding domestic sales. I remember going to meetings with my parents where people stood up at the podium and were afraid of it breaking 350 million pounds. And that number went up to 500 million pounds. And then a billion pounds. And then one-and-and-half then its up to 2 billion. I’ve always been scared that’s going to be an end to it, but it hasn’t happened yet.”
The collapse of the housing market in 2008 might have slowed the encroachment of the cities onto farmland – forcing urbanization into a crawl – but things have picked up plenty in the last 18 months as the economy has rebounded and developers have come back into the fold.
But Phippen isn’t worried.
Some growers were so concerned about the encroachment of blacktop that went so far as to play a role in helping steer things like general plan updates and civic undertakings often overlooked.
The statistics, he said, don’t necessarily back up what people might see on a local level.
“It’s a crop that’s still continuing to grow. To you and I living in two urban areas that are gobbling up farmland, either vineyard or orchards, it doesn’t seem that way, but up in the foothills and the areas east of Oakdale they’re planting almonds like crazy,” Phippen said. “That rolling pasture up there, irrigated and non-irrigated, they’re putting in 30-to-50,000 acres per year. We’re spiraling with growth and while we see some farmland being lost to urbanization, and you never get that land back once its urbanized, there’s a lot of new orchards going in all over the state.
“In California it’s the nut crops and the crops that are producing more money per-acre that are being planted. Almonds are very successful and they along with walnuts and pistachios are replacing cotton and grapes and corn and the row crop commodities because regulations and the cost of farming is so high you’re going to higher revenue from something else.”
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Excited about SSJID plans to pressurize irrigation system
There are plenty of things that Phippen says he thinks about as he looks into the future of an industry that continues to transform.
Mechanization has changed a lot of things that used to be done by hand – something he saw firsthand when he had to lay off people in his sorting facility after upgrading to a robotic system in order to take what for him was, business-wise, the logical next step.
The industry will also have that logical next step.
In some instances those steps will be far-reaching – price-points that are set based on tonnage – and in other instances they’ll be much more personal.
Like when the irrigation district that you’re a part of goes completely high-tech and takes steps towards a widespread pressurized delivery system that will revolutionize the way that people will get and utilize their allotments of irrigation water.
“I’m so proud of SSJID to have commissioned the study of how to pressurize the entire system. Those guys really got it,” Phippen said. “It’s really going to be revolutionary and solve so many problems and it will be a huge investment but when you think back to those directors that thought, ‘Let’s build a dam up there and put in some ditches,’ – it’s parallel with that.
“I hope I live long enough to see them pressurize the entire system. I don’t know if you can tell or not, but I’m very jealous of the other growers in Division 9 right now. I’m excited about the possibility of the future.”