With harvest season a few weeks away, nut growers in the Central Valley are already weary of new higher tariffs on some of their products, such as pistachios.
And they worry that if the international market dries up, it could lead to a supply glut and falling prices.
In addition, China and other countries have proposed countermeasures to President Donald Trump’s tariffs that will hit the Valley nut industry even harder.
These unknowns are creating doubt in what should be a banner year for almonds.
Growers project a record almond crop of 2.45 billion pounds for the 2018 season. That’s up 7.9 percent from 2017.
Grower Pessimism at Fresno Food Expo
“It’s caused buyers to take a wait-and-see attitude to see what the next step is,” Zion said.
About a quarter of the California market exports to China, which raised pistachio tariffs earlier this month from 20% to 45%.
“We need the Chinese market. So, we may have to have some price concessions. Or, possibly we try to move the product into another marketplace,” Zion said.
Lower Prices Bad For Growers, Good For Consumers
Edgar Rodriguez of Madera-based Heart Ridge Farms says consumers would benefit from lower almond prices.
“The tariffs are going to bring down the price because we’re not able to sell to as many countries, so we’re going to have a more of a surplus,” Rodriguez said. “(It is) bad for us, good for the consumers, because you’ll be able to get a quality product at a cheaper price. But with so many jobs and lives that depend on almonds, it will have an effect.”
For Minturn Nut Company of La Grand in Merced County, demand already is down.
“It’s kind of been at a standoff between a lot of our buyers and a lot of our growers as well if we want to move product. It’s been a real standstill. There’s a lot of uncertainty,” said Minturn field representative Markus Espinoza.
Tariffs Complicate Matters For Exporters
Allen Demo is a Southern California-based exporter of products to the world market. He is concerned about the tariffs.
“There are going to be a lot of challenges with the tariffs if they come on of how much volume is going to be able to go over there,” said Demo of Freida’s Inc.
“If it is a limited amount of volume, you have a lot of different shippers who ship over there. So, they are going to be challenged to place the product in other countries and do more promos in the United States.”
Growers are hoping the trade war comes to an end before the nuts are picked.
“We’re still a healthy snack item, but we’re a little bit price sensitive,” Zion said. “So, it would not be a good thing for us if this goes on very much longer.”