The fate of an almond tree without water.

Photographer: Justin Sullivan/Getty Images

Amid a Drought, Cue the Almond Shaming

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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It takes a gallon of water to produce an almond. That’s one remarkable fact. Here’s another: 82 percent of the world’s almonds are grown in California, almost all of them in its agricultural heartland, the Central Valley. Here’s another: Almond growers use about 10 percent of the state’s water supply every year. And here’s yet another: California’s mountain snowpack, the main source of the Central Valley’s water, is at 5 percent of its historical average for this time of year.

Couple those remarkable facts with the spectacular rise of the almond and in particular almond milk as a dietary staple for the affluent and health-conscious -- a rise driven in part by the marketing efforts of the Almond Board of California -- and you have the makings of a collision, or a backlash, or something. My Bloomberg colleague Joe Weisenthal tried to get #almondshaming going as a Twitter hashtag Monday, and didn’t quite succeed. But there is definitely some almond shaming going on.

As almond and pistachio grower Brad Gleason complained in a Los Angeles Times op-ed last month:

Article after article in newspapers, magazines and online put nut growers in a bad light related to the drought. The whole equation seems to be reduced to a single number wielded by our critics: It takes one gallon of water to grow one nut.

Gleason argued that compared with other crops, almonds aren’t that thirsty. Growing a single watermelon, he wrote, takes 168 gallons of water. That may be true, but a watermelon is a lot bigger than an almond. If you look at the quantity of water needed to produce a given weight or caloric value of food, almonds and other tree nuts are way up on the charts -- they use less water than beef, but more than chicken or dairy and much more than most fruits and vegetables.

So that isn't a great defense. But Gleason also told the interesting story of how he came to be a nut grower. In the 1980s he grew cotton, as did lots of Central Valley farmers -- cotton was one of California’s biggest cash crops in those days -- but he saw the writing on the wall. Cotton could be grown in many other places around the country and world, and the federal subsidies for water and price supports for cotton that kept the industry going in California seemed unsustainable. So Gleason decided to move to a higher-value crop that could thrive without government support. Almonds fetched a good price, and were easy to store and ship. So that's what Gleason planted. He wasn’t the only one: 

I did a one-year stint as a farm and business reporter in the Central Valley just as Gleason was planting his first almond trees (he was in a different county, so I didn’t know him). The state was in the throes of a drought, which lasted from 1987 to 1992, and the political tide had begun to turn against water subsidies for farmers.

I can remember the extension agents from the University of California urging farmers to move from cotton and alfalfa to crops that brought in more revenue per gallon of water used. And while a few counties along the coast between San Francisco and Los Angeles responded by becoming berry-growing juggernauts, in the Central Valley the big shift was to nuts.

Dairy has remained California’s No. 1 agricultural product ranked by revenue, but almonds have moved up to No. 2, ahead of grapes. Add in walnuts and pistachios, and California’s tree nuts brought in more than $8.5 billion in 2013, making them the biggest cash crop in the biggest agricultural state. (Iowa is No. 2, with $31.2 billion in agricultural receipts in 2013 to California’s $46.4 billion, in case you were wondering.)

The nut boom was a rational and reasonable response to economic and hydrological reality. But now, with the state hit by a drought far worse than the one that jump-started it, it’s proving to be problematic.

Almond growers can’t just let their orchards lay fallow as some other farmers can -- if they don’t water, they lose trees that are meant to produce for 18 to 20 years. So they’ve been buying water on the open market, and digging wells. Because almonds remain such a lucrative crop, almond growers are able to outbid other farmers for water and dig wells so deep that they cause entire communities to run dry. The drought hasn’t killed the California almond business. Instead, it has made almond growers into symbols of agricultural power and waste.

Which brings us to a funny thing about the agriculture business in California. By global agricultural standards, it’s immense, but relative to California's economy, it’s small potatoes. Here’s agriculture’s share of California’s gross state product, going back to 1963: 

As you can see, agriculture's share has risen a bit over the past few years, and the tree-nut boom deserves some of the credit for that. Also, this accounting leaves out agriculture-related businesses -- add in food and beverage manufacturing, for example, and the percentage of gross state product rises to almost 3 percent. That’s still not much, though, and only a small percentage of Californians now owe their livelihoods to agriculture. In years when water is plentiful, this isn’t really an issue, but droughts tend to bring conflicts and shifts in the power relationship.

The 1976-77 drought, which brought strict water rationing to the northern part of the state while Southern Californians kept watering their lawns, put an end to new projects to transport water from north to south. Northern California voters made sure of that in the stunning 1982 vote against the Peripheral Canal.

The 1987-1992 drought put more of a focus on Central Valley farmers. The Central Valley Project Improvement Act, signed into law by President George H.W. Bush in 1992, cut water subsidies for farmers from the federal Central Valley Project and gave the fish in California’s rivers new weight in water decision-making.

What will this drought bring? Nothing good for California’s farmers, I would think. They use 80 percent of the state’s water to generate about 2 percent of its economic output. Using water is what farmers do, of course -- it is an essential input for them in a way that it isn't for most industries. But they’re doing this in a state where almost all political power now resides with coastal urbanites and suburbanites. The almond shaming has just begun.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Justin Fox at justinfox@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net