The struggles of the American almond industry are getting sold off farm by farm in California. Trinitas Advantaged Agricultural Partners IV and Trinitas Farming LLC filed for Chapter 11 bankruptcy fourth months ago.
Operations were concentrated in five California counties: Contra Costa, Fresno, San Joaquin, Solano and Tulare.
Debts had piled up far faster than the almond harvest. Trinitas faced a staggering $188 million debt.
RELATED: This Fresno Bee article examines the efforts that Trinitas is making as it navigates bankruptcy.
Trinitas’ financial woes illustrate the challenge for the industry. Like so many agricultural producers, almond producers had been very successful expanding their output. The obstacles that grew included a global market that failed to expand enough to welcome the production.
Prices have shelled the almond market. A decade ago, premium almonds might get the producer $4 per pound. That has been halved since then.
A decline like that could threaten other investors who may have taken on large debt for almond operations.
In February’s bankruptcy filing to the United States Bankruptcy Court Northern District of California San Jose Division, Trinitas’ attorneys explained, “high interest rates impacting the Debtors’ cost of debt servicing, the substantial capital needed to support early phase almond orchards and the concomitant rising cost of capital, and sustained, record-low almond prices all contributed to Trinitas Farming’s serious liquidity constraints.”
Almond production also requires substantial access to water. That can be an additional challenge for producers, and it also makes the industry a target for criticism from environmentalists who worry about the ecological impact.
The California Almond Board points to research that shows the industry has reduced its use of water by 33% over the past 20 years.
In 2015, National Public Radio did a story looking at the water use criticism flooding the almond industry. Citing increased demand at the time worldwide, some producers switched from growing tomatoes and melons to almonds instead.
That increased water usage as the almond industry grew and raised the level of criticism.
RELATED: Read or listen to the 2015 National Public Radio story on the almond industry’s water requirements here.
California is the dominant state for almond production in this country. But that is an understatement. The California Almond Board says that the state produces nearly 100% of the almond harvest in the United States and 80% of the global supply.
So, Trinitas’ bankruptcy has many in the almond industry paying close attention.
