March 31, 2021

Dispelling Common Misconceptions About Almonds' Water Use

by Sara Wensley

Director, Growth and Marketing

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Dispelling Common Misconceptions About Almonds' Water Use
FarmTogether's El Nido Almond Orchard - Crowdfunding Property
For many reasons, almonds are actually a very sensible fit for California farmers, and positioned to continue producing well even during a drought.

California is no stranger to drought. The entire history of agriculture in California can be told through cycles of extreme dry and extreme wet - there really is no such thing as “normal”. That being said, its propensity to experience extreme climatic conditions hasn’t stopped it from becoming the leading powerhouse of agriculture among all US states, especially when it comes to certain crops. Almonds are a great example - California is the only state where Almonds are grown commercially as its climate is uniquely suited for them, and yet the US accounts for 80% of global almond harvests.

Given the disruption droughts have caused for the state’s agriculture industry, as well as the prolonged nature of the last major statewide drought from 2011-2015, California’s almonds have attracted attention due to their demand for water. In reality, though, almonds’ water requirements actually compare favorably to alfalfa, many field crops, and rice, and require substantially less water than most livestock products. Thus, while media buzz might suggest that growing almonds in California is not a sustainable choice, it’s important to examine the full story.

We recognize that there are significant concerns in regards to water supply risk in California, and that is exactly why we take water risk so seriously. Sustainable water usage is central to our due diligence and underwriting processes, and a core component of how we select our properties. Our almond offerings are no exception.

As a result, we thought it would be beneficial to dive into some of the recent headlines surrounding almonds, and to address some of the common misconceptions of this crop and their associated water usage.

For many reasons, almonds are actually a very sensible fit for California farmers, and positioned to continue producing well even during a drought. In fact, with new technical advances in irrigation that have made almonds more water-efficient, they use much less water per kilo-Calorie of food than many other agricultural products.

Let’s dive into it.

Misconception 1: “It takes 1.1 gallons of water just to grow one single almond.”

This fact was one of the major headliners about almonds during California’s last drought. Much of the data behind this statistic was based on global estimates of water use for almonds, rather than specific to almond farming in California.

An updated analysis of almonds’ “water footprint” in California found that California’s average was actually about 30% less total water demand than the global averages that were widely reported during the last drought. Conducted in 2018, this analysis also highlighted that implementation of water-saving measures such as micro-drip irrigation technology by almond growers was well above the average rate for all of California’s farms. This has already led to an average of 33% water savings per acre over the last 20 years and will continue to improve as the technology evolves.

In the backdrop of Almonds’ improving water efficiency, California’s overall water allocation to agriculture has been decreasing for the last several decades, while gross farm production value has been rising. From 1980-2015, agriculture’s share of overall freshwater use statewide decreased by 14%, while the total combined value of all harvests jumped 38%. These trends will likely continue across all commodities but especially in Almonds - in fact, the Almond Board of California has made a direct pledge to make the crop another 20% more water-efficient by 2025.

What’s more, farmers themselves have disputed the way that this statistic was reported during the last drought on the grounds that it simply doesn’t tell the whole story. For starters, it ignores the fact that the almond itself represents one small component of the tree itself - much of the water used in the growth of the crop is consumed by the growing, leafing, blooming, fruiting tree. The “1.1 gallons per nut” statistic doesn’t express water use in proportion with the water demands of the whole plant, and therefore doesn’t account for the value provided by two key by-products of almond harvesting. Besides the kernels, which we eat, the hulls of the almond fruit are used for livestock feed and even for alternative energy, while the shells are often repurposed for secondary farming uses such as livestock bedding.

Misconception 2: “Almonds use more water than any other agricultural product.”

This claim was born out of the widespread reporting on almonds’ water demand from the last drought. When this statement was made, almonds actually made up approximately 13 percent of California's total irrigated farmland and used less than nine percent of the state's agricultural (not total) water.

When measuring water requirements in gallons-per-pound-harvested, almonds use a comparable amount of water to most other tree nuts as well as to some fruit crops and specialty products. For example, it takes about the same amount of water to produce one pound of almonds as it does one pound of walnuts, cashews, or olive oil. Beef, as an example, takes more than double the amount of water than almonds to produce one pound of beef versus one pound of almonds.

Still, making these comparisons purely in terms of the volume produced of each product misses the nuance of those products’ nutritional value. Global almond demand has experienced rapid acceleration over the last couple of decades, driven largely by their popularity in snack foods as well as their usefulness in a wide range of processed forms, such as almond milk, almond butter and even as an ingredient in meat substitutes. Almonds are particularly useful for these kinds of products because of their energy density and high protein and fat content, among other characteristics.

If you break down water use by the nutritional content of each agricultural commodity, almonds actually look like a much more favorable choice even in the context of a drought. For example, in terms of gallons per kilocalorie, rather than gallons per pound, almonds actually outperform sheep & goat meat and are roughly consistent with poultry products, while significantly outperforming beef. In terms of water used per gram of fat or protein, almonds even compare favorably with some legumes, root crops, and some cereal grains like rice.

Lastly, almonds water use looks even more justified when compared with other crops in terms of the “economic productivity of water” in their cultivation. This measure amounts to the total value of the crop harvested per acre-foot of water applied to the field over the course of the growing season. California’s almonds and other tree nuts are so profitable that they have been estimated to generate about three times as much value per unit of water used as rice, and nearly ten times that of corn.

Misconception 3: “Almonds aren’t a natural fit for California’s dry climate.”

California’s last major drought from 2011-2015, as well as the recent news that the state has re-entered drought conditions just this year, have led many people to label almonds as an improper fit for the region.

However, almonds as well as many tree and vine crops are actually predisposed to perform well  specifically in “Mediterranean” climates such as that of California. Fairly scarce around the world, this climate type can generally only be found along western coasts of continents between 30-40 degrees latitude in the northern and southern hemisphere. Best described by long, hot, dry summers and wet winters in which the air temperature gets cooler but doesn’t go dramatically below freezing, there are five major regions in the world that combine these characteristics: The Mediterranean basin, Chile, southwest Australia, South Africa, and California.

Crucially, these are exactly the conditions that almond trees need in order to go through their annual cycles of dormancy, leaf-out and budding, each of which are crucial for proper fruit-set and ultimately for economically productive yields. Among all of the major “Mediterranean Climate” regions, California has the most robust infrastructure and water resources to deal with exacerbated droughts.

California’s droughts will, obviously, continue to strain almond production just as they will any form of agriculture, but that doesn’t mean that almonds themselves are an underlying reason for the severity of droughts California is experiencing. A multitude of scientific publications have linked the elevated severity of droughts in California over the last couple of decades to climate change, which will force agriculture of all forms to adapt - whether that’s tree nuts, beef cattle, or row crops. Cycles between hot and dry versus wet and cool periods have always defined California’s climate, and the challenge for all water users in the state is in how to adapt to those cycles intensifying, rather than simply forcing farmers to choose which crops to eliminate.

Misconception 4: “If I invest in farmland planted in almonds, I will inevitably suffer a huge loss during a drought.”

Though a drought certainly places any crop, as well as the farm’s income, under additional stress, it isn’t a foregone conclusion that the drought will mean the ruin of the farm. There are several ways that a farm can be favorably positioned to navigate a period of drought successfully, as well as a few important levers that the farmer can pull during a drought to ensure the health of the crop.

In the San Joaquin Valley, the farms that can weather a drought most easily tend to be those with access to multiple water sources, and especially those that have access to both surface water and groundwater. Most of the aquifers in this part of the state are critically over-drafted and typically have a lower surface water reliability due to environmental hurdles moving water through the Delta. Having redundancy in water supply means that in the event that surface water access is reduced, growers can still irrigate with groundwater.

In the Sacramento Valley, Oregon, and Washington, a single source of water is often more than adequate to ensure water security. 75% of the precipitation in California falls north of Sacramento which provides substantial recharge for this region’s aquifers. While there are no critically overdrafted aquifers north of Sacramento, sustainable groundwater pumping is a central focus of California. In 2015, California enacted the Sustainable Groundwater Management Act (SGMA), which mandates all basins to be sustainably managed by 2040. It gives local agencies authority to develop sustainability plans with sustainability being defined as the mitigation or avoidance of six undesirable impacts. Ensuring that irrigation strategies employed on each property avoid the unreasonable deterioration or adverse impact on those six sustainability indicators is a key consideration of FarmTogether’s approach to screening properties that we are considering making available for investment.

Meanwhile, installing micro-drip irrigation infrastructure on the farm and implementing a variety of other irrigation best practices can make an almond orchard dramatically more water-efficient. Tracking the moisture levels at different soil depths throughout a growing season, as well as the stages of maturation of the crop itself, and adjusting irrigations to optimally deliver the right amount of water to the crop at the right time can both provide huge savings.

Additionally, being conscientious with equipment maintenance and capturing runoff water during spring rain events will both reward farmers during times of drought. Good equipment and irrigation line maintenance can ensure that irrigation water is delivered evenly over an entire field, avoiding losses in places where hoses may be in disrepair. Furthermore, spring rain events, although less frequent during a drought, will often have precipitation rates that exceed the rate of infiltration of water into the soil, Using cover crops and soil amendments to improve aggregation and slow the rate of runoff from the farm can both be attractive options for farmers.

Almonds remain an attractive farmland investment, and deserve a place in California’s future

Rather than being a poor fit because of their water requirements, almonds are actually uniquely well suited to California’s climate. Most of California’s almond farmers are already employing best practices for irrigation, and given the strength of the state’s agriculture industry, they have a wealth of resources at their disposal to continue improving. Though droughts are common, they actually reinforce the incentives for almond farmers to be good even better stewards of their water resources, as well as make the case for almond production instead of other crops: Almonds’ economic value per unit of water used is substantially higher than that of alfalfa, field crops, irrigated pasture and rice.  It’s no surprise, therefore, that acreage planted in almonds effectively doubled between 2005 and 2015 despite the historic drought in the latter 5 of those 10 years. The popularity of almonds is driven both by accelerating global demand as well as by a pronounced shift among farmers toward higher-value crops.

If located favorably and managed properly, an almond farm is a great option for any new farmland investor even during times of drought. At FarmTogether, we pride ourselves on an approach that rigorously emphasizes good water stewardship and management, and have built our pipeline for sourcing new opportunities specifically around searching for characteristics that set a farm up for financial success through even the most adverse conditions. Our latest offering, Antelope Almond Orchard in Tehama County, CA is emblematic of these characteristics and is an exciting opportunity for anyone looking to diversify their portfolio with farmland.

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Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.

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