Investing in California Almonds
September 1, 2019
Almonds don’t grow just anywhere. They require the right mix of climate, soil type, water and infrastructure of harvesters, packers and shippers. That right mix is found in California. Today, 80 percent of almonds consumed around the world come from California and are also the state’s largest specialty crop export. Not surprisingly, the amount of California land devoted to almonds has nearly doubled in the past 20 years, to more than 900,000 acres.
More than 6,800 almond growers in California are using sustainable agricultural practices that are economically viable and environment friendly, thus protecting the local communities and providing great economic benefits as well. In 2014, the University of California Agricultural Issues Center (AIC) published an article on the economic impacts of the California Almond industry, pointing out the positive effects the almond industry has on the economic well-being of California. The benefits that almonds offer are:
Almond growing in California typically takes place across four stages: Spring bloom season, Summer growing season, fall harvest season and Winter dormant season.
In ideal conditions, California produces more than 80% of world’s almond supply and 99% of domestic supply, putting this precious commodity on the radar of investors. Approximately 90% of California almond farms are family farms, owned in large part by 3rd and 4th generation family growers, which is a fact we can all appreciate!
In the United States, per capita almond consumption has jumped 225 percent since 2005—hitting two pounds per year and surpassing peanuts as America’s favorite nut. Global demand for California almonds continues to be strong across countries and product types. It’s no wonder! With ongoing research about the many health benefits of almonds, their popularity continues to grow.
According to the Almond Board of California, August 2016 almond shipments totaled 170 million lbs., compared to 126 million lbs. in 2015, an increase of 34.8%, beating the previous record by 22 Million lbs. Planting at almond orchards is expected to rise about 2.0% annually, and production is expected to grow 3.5% per year over the next ten years. Due to drought conditions, a short-term decrease in demand is expected, but we expect that average demand over the next 10 years will be far better than the average of the past 10 years.
Even with trade challenges, the 2018/2019 harvest saw records for domestic shipments, exports and production, making investing in almonds an exciting and potentially profitable move. Long term opportunities for almonds are growing as the demand for them is rising and the supply of farmland is declining. The owners of a high quality almond orchard are positioned to benefit for years to come.
Historically, investing in farmland is a smart move, with returns averaging over 12% since the great depression. Finding investment farmland can be a difficult process, and the high cost and complexity associated with owning and managing farmland can act as a deterrent. Fortunately, there are options that make building wealth with almonds hassle free. You can read more about the options for making money with agriculture here, but our favorite method is crowdfunding.
Farming is personally rewarding but requires labor and expertise. Traditional agricultural investments ( ETFs/REITs ), don’t require much labor but they do lack a tangible connection to your investments. Crowdfunding, in our somewhat bias opinion, provides the best of both worlds.”
Leave the farming to the farmers but allow your investment to directly help them grow their operation. You can do this while enjoying the passive income that this asset class offers. not to mention the tax benefits offered by crowdfunding.
View our Almond Orchard and other agriculture investment opportunities here.
