Breaking News on Food & Beverage Development - North AmericaEU edition | APAC edition

News > Suppliers

Read more breaking news



Hain Celestial predicts ‘pricing actions across the industry based on the California drought’ - especially for almonds

By Elaine WATSON , 07-Feb-2014
Last updated on 25-Mar-2014 at 00:40 GMT2014-03-25T00:40:38Z

Prolonged drought in California could result in smaller almonds and less supply - but it's too early to make predictions about the 2014 crop
Prolonged drought in California could result in smaller almonds and less supply - but it's too early to make predictions about the 2014 crop

Natural and organic products giant Hain Celestial says it expects to “see pricing actions across the industry based on the California drought”.

Speaking to analysts on the firm’s second quarter earnings call this week, Hain Celestial United States CEO John Carroll said: “Going forward, we expect pricing for almonds, dairy and California-based commodities to rise.

“These increases will drive us to announce price increases on the products affected by these higher commodity costs, but we will not be alone in this.”

He added: “Almonds have been under cost pressure even prior to the drought. So we will price on almonds very shortly because we have a sense of where the crop is going this year.

“We buy as many almonds as anybody in the packaged food business with the exception of people who just sell bagged nuts. And we're ready to pass on pricing that addresses where the costs are going for the next crop.”

Blue Diamond: Drought in California could cause stress to the orchards, which may result in smaller almonds and less supply than 2013

So what is happening with the 2014 almond crop?

Bill Morecraft, General Manager of the global ingredients division at Blue Diamond Almonds - the world's largest almond marketer and processor - told FoodNavigator-USA that the industry is still selling the 2013 crop.

He added: "It is still too early to predict the almond kernel size and prices for the 2014 crop," which will likely be harvested in August.

“Our first official look at the size of the 2014 crop will come this May with National Agricultural Statistics Service (NASS) subjective estimate," he said. "After this assessment, we will have a better projection of what to expect for this crop.”

Where possible, says Blue Diamond Almonds, “Growers are taking matters into their own hands to purchase water from various sources to supplement their supply. It is a certainty that we’ll see stressed orchards and possibly lighter kernels due to not being able to secure adequate irrigation water in certain locations in our state. The only thing that will help the current situations is a wet spring, and current weather predictions are not favorable.”

Growers will be more cautious in selling the remainder of the 2013 supply

Asked about the impact of the prolonged drought in California, he said: “It could cause stress to the orchards, which may result in smaller almonds and less supply than 2013.”

However, much depends on when the stress occurs in the growing cycle, he said. If, for example, it occurs during the nut-sizing period (typically post February bloom through April), the kernel size is apt to be smaller.  

Meanwhile, significant stress from late April through to the end of May, while the nut is solidifying, can have an adverse impact on kernel weight.

“Growers will be more cautious in selling the remainder of the 2013 supply of almonds to prepare for the potential effects of the water situation. There are many variables to take into consideration, such as weather patterns and water supply, therefore it is still too early to make predictions for the almond crop moving forward.”

Water is the number one topic for farmers in California, says Blue Diamond Almonds: “Reservoir levels are at historic lows, well below seasonal averages. Moreover, the statewide snowpack water content in the Sierra Nevada watershed is estimated at 20% of the normal average.”

In the meantime, he said: “Market prices remain very firm.”

Almond Board of California: Innovative irrigation practices have enabled farmers to do more with less water

The Almond Board of California told FoodNavigator-USA that it "shares concerns about California’s sustained drought conditions".

A spokesperson added: "The California almond growers, most of whom are multi-generational family farmers with 50 or fewer acres, are committed to sustainable farming and have been using state-of-the-art farming practices and technologies that minimize the water quantity required for maximum yield per acre.

"Over the last three decades, innovative irrigation practices by California’s almond growers have helped to almost double per-acre yield by using close to the same amount of water applied per acre. Our current research is looking at new breakthroughs in water-efficient farming and technologies that reduce water usage with minimal impact to orchard production."

The California almond crop has been growing steadily for 40 years, but things really took off after the turn of the century, with the crop doubling in size from around 1bn lbs a decade ago to an estimated 2bn lbs in 2013.

Several factors have contributed to the meteoric rise of almonds, including a growing interest from manufacturers interested in their health benefits, a rapidly growing market for almond-based products in the dairy free market, wider use in ready to eat cereals, plus continued demand from more traditional bakery and confectionery customers.

Click here to read more about the potential impact of the drought on commodity markets.

Related products

Key Industry Events


Access all events listing

Our events, Shows & Conferences...

Live Supplier Webinars

Food Innovation editorial webinar
William Reed Business Media
Optimizing California Almonds for Plant-Forward Formulations
Almond Board of California

On demand Supplier Webinars

FoodNavigator-USA Flavor Trends editorial webinar
William Reed Business Media
FoodNavigator-USA Clean Label editorial webinar
William Reed Business Media
All supplier webinars

Promotional Features