Alston, Julian M.

Carman, Hoy F

Murua, Juan Ramon :

With fewer acres , more mechanization . . . California leads Spain in almond production , exports to world Juan Ramon Murua R Hoy Carman Q Julian Alston Withrapid expansionof almond acreage since the late 1960s , Cali - fornia has become the worldâ??s dominant almondproducer and the major supplier in export mar - kets . Spain , the worldâ??snumber two producer , has more than three times Californiaâ??sacreage , but its comparativelylow average yields have limited its penetration of export markets . Thisarticle ex - amines differencesin the two al - mond producers , particularly with regard to yield and response to economic incentives . Almond acreage panded dramaticallyfrom the early California and Spain dominate worldor California almond acreage totaled 1960s through 1980 . The sharp expan - production and trade in almonds . F 113,100 acres in 1960 . It more than sion of Spanish almond acreage began 2 the three marketing years 1989 - 1990 doubled during the 1960sto 232,300 to 3 years later and continued until 1980 . through 1991 - 1992 , Califorma accounted acres in 1970 and continued to grow to As almond production expanded in for an average of 66.3 % of the worldâ??s al - 389,000 acres in 1980 . Growth slowed California and Spain , Italyâ??s production mond production ; Spainâ??s average share during the 1980s , with acreage totaling decreased . Californiaâ??s production first was 17.1 % . Of total almond exports dur - 431,900 acres in 1990 . Spanish almond exceeded Italyâ??s in 1966 and has continu - ing the same period , . California ac - acreage also expanded dramatically ously exceeded Italyâ??s since 1969 ; Span - counted for an annual average of 80.1 % ; from 407,700 acres in 1960to 737,800 ish production exceeded Italyâ??sin 1971 . Spain accounted for 15.9 % . Other major acres in 1970 , exploding to 1,394,300 The California and Spanish almond almond producers - Turkey , Italy , acres in 1980 . Expansioncontinued to industries have similarities , such as pat - Greece , Morocco and Portugal - collec - 1,516,100 acres in 1990 . Almond acreage terns of growth , but there are also major tively accounted for 16.6 % of world in Spain is now 3.5 times greater than in differences.This article compares and production and for only 4.0 % of ex - California . contrasts almond production in these ports . Californiaâ??s almond industry is con - two areas , based on the view that inter - California and Spanish dominance of centrated on irrigated acreage in the San national marketing requires a global the world almond market is a recent de - Joaquin and Sacramentovalleys . â?쳌 New â?쳌 view of competitors and their capabili - velopment.Italy was the worldâ??s major in a historical sense , Californiaâ??s almond ties . The changingyields and acreage in almond producer as recently as the late industry is made up of highly mecha - California and Spain are analyzed . 1960s . Californiaâ??s almond acreageex - I I CALIFORNIA AGRICULTURE , NOVEMBER - DECEMBER 1993 nized , relatively large production units . The 1987 US.Census of Agriculture re - s ported 6,717 farms with 427,685 acre of almonds , for an average size of almost 64 acres . When the 2,449 farms with less than 15acres are removed from the total , one finds that there were 4,268 farms with 412,897 acres for an average of al - most 97 acres of almond trees per farm . In 1987 , there were 104California farms with 500 acres or more of almonds . Almond trees have been traditional in Spain since Arab domination more than 500 years ago . Although almond or - chards are widely dispersed throughout Spain , commercialproduction is concen - trated in the Mediterranean regions ( fig . 1 ) . Approximatelythree - fourths of Spain's total almond acreage is located in three regions - the Ebro region to the north , the Levanteregion in the Tcenterhe and eastern Andalucia to the south . Levanteregion , which includes Valencia , currently accountsfor one - third of Spanish almond acreage . Fewerof than 112,000 of Spain's 1,516,100 acres almonds are irrigated ; most irrigated acreageis located in the Levante region . The Spanish almond industry is best characterizedas consisting of lthousandso - of very small units , most of which are cated in arid areas.Almond production is typically a sideline for farmers who rely on other enterprises for income.duc - Large - scalespecializedalmond pro tion units are the exception in Spain . Al - though the area devoted to almond pro - duction has increased rapidly , the industry has not evolved into a modern , efficientcompetitor . Average yields Average annual almond yields tinh both California and Spainvary wi al - ternate bearing tendencies and weather conditions during the bloom period . Spanishyields for dryland almonds are also affectedby rainfall during thes growing season.California yield are much higher than Spanishyields . For ex - ample , California growers had an aver - age yield of approximately 1ton ( 1,996 pounds , in - shell , or 1,198 pounds , shelled , using an average 1conversion989 . factor of 0.6 ) per acre during 1985 - OverallSpanishyields during the sameds 5 years were approximately 389 poun per acre , in - shell . Spanish dryland yields averaged approximately 318 pounds per acre , in - shell ; irrigated yields averaged , approximately 1,197pounds per acre in - shell.Because of low yields , annual totaly Spanish almond production has recentl averaged about one - fourth of California's , even though Spain has more than three times the acreage . A model of average annual California al - CALIFORNIA AGRICULTURE , VOLUME 47 , NUMBER 6 12 mond yields was estimated for 1950 - 1990 . This model included variables to measure the impact of alternate bearing , an upward trend in yields due to im - proved technology , the changing age structure of trees and rainfall during the bloom period in February and early March . The estimated yield equation is Equation A ( seebox ) . These results are generally consistentwith expectations and they track the data well . The coefficient of determination ( R2 ) of 0.82 indicates that the variablesin - cluded in the equation accountfor 82 % of the variation in annual almond yields . The coefficienton lagged yield is close to - 1 , which indicates that yields tend to be distributed symmetricallyaround the normal value due to alternate bearing.x - This implies that any yearâ??s yield is e pected to be below ( or above ) normal byas Above , Spain has morethan three times as much almond acreage , but Californiaâ??sirri - the same amount as last yearâ??s yield w gated orchards ( below ) and mechanized farming practicesproduce almond yields four above ( below ) normal . The smallposi - times greater per acre . tive coefficient on the change in yield from 2 years ago to last year is consistent with the idea that some changesin yield persist to some extent for more than 1 year . The coefficient on trend ( T ) indi - cates that average annual yields in - creased 0.04 ton per acre over the 40 - year period . The coefficientson the variables for young and old trees are plausible . As the proportion of young trees rises , average yield falls , and as the pro - portion of old trees rises , averageyields rise . The latter result was unexpected , but not implausible if the majority of trees in the older category has been rela - tively young - that is , trees at their peak yield rather than trees in decline . In any event , the coefficient was not signifi - cantly different from zero by statistical standards . Finally , as expected , in - creased rainfall during the bloom period X in February resulted in lower average 3m yields . A rainfall variable for March did Spanishyields because of the high per - not add to the explanatory power of the were not included since data on the age yield equation and was not included in centage of dryland cultivation.January - distribution of Spanish almond trees the final equation presented . February rainfall and February frost had were not available . The variable for the expected negative impact on yields ; An adaptation of the California yield lagged yields ( yt - 1 - yt - 2 ) did not add to increasedrainfall during the growing model that considered differencesin the explanatorypower of the equation seasonwas associated with higher production methods and data availabil - and was dropped . The yield equation for yields , even on irrigated acreage . ity was estimated for Spanish almond dryland , which is most of the acreage , Of the severalfactorsthat explain yields . Because of the emphasis on dry - explains a much higher percentage of Spainâ??s low almond yields , the lack of ir - land production in Spain , one would ex - the annual variation in yields than does rigation systems in arid areas is a major pect rainfall during the growing season the equation for irrigated yields , as mea - cause . Spanish almond trees are also es - to be an important determinant of sured by the coefficient of determination pecially sensitiveto late winter frosts ; yields . Separate equations for dryland ( R2 ) statistics of 0.75 and 0.42 for dry - the most common varieties of Spanish and irrigated almonds were estimatedqua - land and irrigated acreage , respectively . almonds bloom early , making them vul - for 1971 - 1989 . The estimated yield e There was an annual downward nerable to late winter and early spring tions are Equation B ( seebox ) . trend in average Spanish dryland yields frosts.Because of this phenomenon , Variables included in the Spanish of approximately 9.6 pounds per acre there is an interest in introducing laterma - yield equations differ from some of during 1971 - 1989 . At the same time , an - blooming varieties . We have no infor those in the California equation . Vari - nual irrigated yields increased approxi - tion on Spanishuse of bees for pollina - ables for the proportion of young bear - mately 33.8 pounds per acre . Overall , tion , but given the small - scalenature of ing ( YB ) and old bearing acreage ( OB ) there was a slight downward trend in CALIFORNIA AGRICULTURE , NOVEMBER - DECEMBER 1993 13 opment of the additional 40,000 acres . These results are generallyconsistent the industry , this could be another rea - The significantincreasesin Spanish with expectationsand the variablesin - son for low yields . almond acreage and production that oc - cluded on the right - hand side of the Most expansion of almond plantings curred during the 1970s can be largely equation explain about 66 % of the varia - has occurred on poor land . Perhaps be - explainedby the Spanish governmentâ??s tion in the net annual change in Califor - cause Spanishfarmers traditionally de - planting subsidies and supports , which nia almond acreage . California almond voted land to almond orchards that com - were associated with an increase of producers have tended to increase new peted only with olives , they believed about 175,000 acres , and by generallyfa - almond plantings and decrease remov - that almonds would yield profits oevenlicy vorable almond prices which aencour - nd als when almond prices and revenues on marginal land . Such a planting p aged producers to significantly exp increased , other factors being equal . Asses has obviouslycontributed to low yields . their investments in almond production . expected , their response to cost increa The nature of the problem can be illus - was to decrease plantings and increase trated with aggregate data . Between Conclusion removals as costs increased.Increased 1965and 1990 , total land area planted to California and Spain , the worldâ??s two new plantings in the previous year ( t - 1 ) almonds increasedby a factor of about major almond producers , expanded al - were also associated with increased net 2.5 , but almond production increasedby mond acreage and production 0signifi - s . investment in year t . a multiple of only 1.8 . cantly during the late 1960s and 197 Thereis some evidence , from previ - Other structural problems are hard ttoy Their production systems differ . Califor - ous research , that changing income tax overcome.In most cases the irregulari nia acreage is irrigated , high yielding , laws could affect producer decisionson of the terrain and the small size of the mechanized and large scale ; most Span - tree crop plantings and fremovals.Vari - orchards forbid mechanization.Al - ish acreage is planted on dryland , isizes ables to directly measure the impact o monds are stillharvested mainly by small scale , is not mechanized , util tax law changes on almond plantings hand ; mechanical harvesting , along with familylabor , has low , variable yields and removalswere investigated , but its accompanyingcultural practices , is and is a secondary enterprise for most preliminary results were mixed and in - barely utilized . Hand harvesting is par - producers . As a consequence , conclusive.Research on the impacts of . ticularly labor intensive , and because of Californiaâ??s higher yields result in an av - changing tax laws on almond acreagere - the small size of the orchards , it is un - ua - erage annual production that is some sponse continues . dertaken mostly by families.This sit four times larger than Spainâ??s on less in A model of annual net changes in the future , how - tion could change than one - third the acreage . Spanish almond acreage , similar to the ever , as family labor becomes scarce . Analysis of producer acreage re - California model , was estimated for One can speculatethat reduced labor sponse indicates that producers in the 1965 - 1989 . The model included variables would have two impacts , a move toward two countries respond to similar factors . to measure the impact of revenues , costs , mechanical harvesting and a reduction Both California and Spanishproducers government planting subsidies and the - of marginal acreagenot suited to me - tend to expand acreage when prices in - acreage of trees in various age catego chanicalharvesting . crease or costs decreaseand tend to de - ries . The estimated net annual change in Changes in almond investment crease net investment when profit poten - Spanish almond acreage ( totalacreage in tial decreases.Spanish producers alsouc - year t minus total acreage in year t - 1 ) Almond production varies from year react , as expected , to planting / prod equation is Equation D ( seebox ) . to year as yields vary and over time as tion incentives and subsidies.Although These results are generally consistent acreageadjusts in response to producer California producers do not enjoy simi - with expectationsand the results of the decisionsregarding plantings and re - lar explicit subsidies , one would expect acreage response equation for Califor - movals of almond trees . Detailed analy - them to react similarly if such subsidies nia . The variables included on the eright - ses of plantings and removals over timed were available . This similarityin eco - hand side of the equation explain mor indicate that net investment in almon nomic behavior is important to the deci - than 80 % of the variation in the net an - production is largely an economic deci - sion - making of California producers . nual changein Spanish almond acreage . sion in both California and Spain . Al - Actions taken by California producers to Spanish almond producers have mond producers , in aggregate , tend to increase almond prices will encourage tended to increase new almond increase acreage in response to favorable increasedproduction by their major in - plantings when average prices increased profit expectationsand decrease acreage ternational competitors if these higher and have reduced acreage when costs in - in response to unfavorable profit expec - prices are transmitted ( as they surely creased.They have also tended to in - tations . Although the processby which will be ) to international markets . crease investment as old almond acreages producer profit expectationsare formed - increased.Spanish producers reacted , a has been modeled in various ways , ex J . R . Murua was Visiting Postdoctoral expected , to government planting / pro - pectations are most oftenbased on re - Scholar , UC Davis , and is now Economist , duction incentivesand subsidies effec - cent experience with revenue and costs . Servicio De Investigacion Agraria , Diputacion tive during 1969 - 1979 . The estimated co - Estimated empiricalrelationships for net General De Aragon , Zaragoza , Spain ; H . effiaent on the subsidyvariable indicates investment in almond production are Carman and J . Alston are Professor and tAs - that Spanish acreage increased almost presented for both California and sociate Professor , respectively , Departmen 16,000 acres more annually during 1969 - Spain . of Agricultural Economics , UC Davis . 1979 , when the subsidies were effective , A model of annual net changesin The authors appreciate the assistance ofd than during other years when subsidies California almond acreagewas esti - Jason Christian , Postgraduate and Richar were not availableto almond producers . mated for 1951 - 1990 . The model in - Sexton , Agricultural Economist and Associ - The estimated coefficient on the variabled cluded variables to measure the impact ate Professor , respectively , Department of for 1972indicates that acreageincrease of revenues , costs and recent plantings . Agricultural Economics , UC Davis . The Al - over 56,000 acres more than expected The estimated equation for net annual mond Board of California providedfunding that year . While some 16,000 acres canes , change in California almond acreage for the research from which this paper is be explained by government subsidi ( annual planting minus annual remov - drawn . no explanation is offered for the devel - als ) is Equation C ( seebox ) . 14 CALIFORNIA AGRICULTURE , VOLUME 47 , NUMBER 6