July 16, 2023
From: Punjabi American Growers Group
To: Almond Board of California c/o Mr. Richard Waycott, President and CEO Almond Board of California Via Electronic Mail and USPS First Class Mail
Re: The Plight of California Almond Growers
Dear Members of the Almond Board of California:
We hope this letter finds you in good health and spirits. We, the undersigned, are California Almond Growers and members of the Punjabi American Growers Group (herein, “PAGG”). We write on behalf of the entire PAGG Membership, which consists of hundreds of Almonds Growers representing a sizeable share of California Almond acres. PAGG members humbly raise our concerns regarding the state of our industry and the plight of its growers. Further, we wish to set forth some agenda priorities which we believe leadership at the ABC should pursue.
Unfortunately, this letter finds the industry in a state where large swaths of Almond Growers are at the breaking point. The survival of many small and medium-sized family farms is now an open question. Not adjusting for inflation, industry revenue has shrunk by over 50% from 2014 to 2022. This is despite a sizable increase in acreage and production. In 2014 gross receipts1 peaked at +/-$7.5 billion compared to +/-$3.6 billion in 2022. Input costs have increased at a rate not seen in more than a generation. Farm equity that, in many cases, took generations to build is quickly disappearing because of borrowing to cover losses. Yes, we are resilient, but we are now running on fumes. The question remains, for how much longer? Simply stated things must change.
We Need to Change Direction
We believe ABC has lost its way and its priorities have become misaligned with the law. The California almond handling industry is regulated by the Almond Marketing Order, 7 C.F.R. § 981 (herein, “Order”). The Order was established in 1950 pursuant to the Agricultural Marketing Agreement Act of 1937, 7 U.S.C.S. § 608c (herein, “Enabling Act” or “Act”). The purpose of the Act is to establish and maintain such orderly marketing conditions for agricultural commodities in interstate commerce as to avoid unreasonable fluctuations in supplies and prices, as set forth in 7 U.S.C.S. §§ 602(1), 602(4).
We think the board should shift its focus towards maintaining “orderly marketing conditions” and focus on avoiding unreasonable fluctuations in “supplies and prices.” With a strong emphasis on “prices.” To achieve this goal, we request the ABC prioritize the following action items.
- Deploy Resources Towards Building Demand
In 2018, ABC outlined “2025 goals” and published a “2025 Goals roadmap.” The goals are noble (further reducing water used to grow almonds, achieving zero waste in our orchards, increasing adoption of environmentally friendly pest management tools, and improving local air quality during almond harvest).
What is notably missing from all these goals is anything related to building further demand for Almonds. Plenty of regulatory agencies impose environmental regulations on our industry- You are the only pseudo-government agency in charge of helping us sell our products at reasonable rates! Please, reallocate resources from quasi-government regulation of items not directly or indirectly referenced in the Enabling Act or Order- and prioritize the very activities that are required of you by law. Simply stated- focus on building long-term demand for almonds.
- Facilitate True Price Discovery by Facilitating More Information From the Demand Side of the Industry
Supply and Demand Economics is predicated on the notion of perfect information. Unfortunately, ABC has done very little to facilitate this dynamic. The industry, by federal regulation, must show its hand. Each California Almond Handler must “keep records which will clearly show the details of his or her receipts of almonds, withholdings, sales, shipments, inventories, reserve disposition, advertising, and promotion activities2” On demand by ABC, Almond Processors must “submit to the Board a complete list of growers who have delivered almonds to such independent handler during that crop year3.” The powers of ABC are broad. ABC has even commissioned satellite imagery to determine the precise acreage and location Growers have planted almonds. This information reveals what the supply of nuts is now and what it will be in the future.
ABC arm-twists the industry to get full transparency on the supply-side of the business. The relevant question is, what are you doing to collect information on the demand side (the buyers, brokers, and traders, etc.)? One of the things our industry needs is a commitment of traders (“COT”) report. COTs aren’t a novel idea- they have been around a long time4. ABC needs to register all brokers and traders that trade more than a threshold amount and require them to report their positions and commitments. The demand side must be required to make periodic commitments of how many almonds they have sold or committed to sourcing and how much of that they have covered. Finally, this information needs to be aggregated and disseminated to the industry. Symmetry of supply and demand information will result in fewer fluctuations in “supplies and prices.”
For example, while a sales commitment report indicates less than expected sales during a month, it would be important to know that participants in the market have large ‘short’ positions – that is, they have sold the product to someone but have yet to buy or “cover” their position. As a thought experiment, a low sales number would likely depress or not increase almond pricing. However, learning that traders are short and have not covered their positions yet would probably support higher pricing. It’s called a short squeeze.
The Board has ample authority to implement this proposal. A handler is any person handling almonds during any crop year (with exceptions for roadside stand operators)5. To Handle means to “use almonds commercially of own production or to sell, consign, transport, ship (except as a common carrier of almonds owned by another) or in any other way to put almonds grown in the area of production into any channel of trade for human consumption “worldwide”6 [Emphasis added].
- Align Organizational Change to Be Consistent With These Priorities
We understand that ABC is facing organizational changes in the coming months- mainly with Mr. Waycott’s departure. We thank him for his selfless service to our industry. With this change, there is an opportunity for ABC to implement meaningful organizational changes. We request that ABC screen future leadership candidates and hand-pick decision-makers in a manner consistent with the above-listed priorities. PAGG’s membership and network consist of former executives with experience running or high-level participation within fast-paced multi-billion-dollar organizations. We volunteer our deep bench of excellent business leaders to participate in this process by making PAGG’s network and resources available in selecting new leadership.
Conclusion
Growers like us have a lot of faith in the ABC. We also have significant capital at risk. We believe that ABC is uniquely positioned to resolve many of the headwinds facing our industry. As growers, we have supported the industry by growing the world’s best almonds. We want to keep doing so in the future. However, it’s high time the ABC acted to preserve our interests and livelihoods.
Thank You for your consideration of these important matters. We request a meeting with the entire Board or committee with the authority to act on our requests. We believe that dialogue relating to and serious consideration of our ideas is important not just for PAGG members but for the benefit of the entire industry. We are concerned for ourselves and our fellow farmers and look to working with You for a brighter future for everyone. While you can reach out to any of the undersigned for ease of coordination, you can contact Jasbir Sidhu or Ameet Sharma via telephone at 408-499-5535 and 530-301-2762, respectively. We are also available via our email address info@paggusa.com.
Sincerely, Aaron Gill
Ajay Desai Ajit Sandhu Amandeep Singh Amandip Malhi Amar Cheema Amardeep Mann Amardeep Sahota Amarjit Pamma Ameet Sharma Amrik Basra Amul Garg Anil Gupta Anil Gupta Anmol Dhillon Arshdeep Singh Arshdeep Singh Arshdeep Singh Arvin Sihota Arvinder Nirwan Balaji Vijayaraghavan Balbir Sidhu Balbir Sohal Baljinder Singh Baljinder Singh Baljit Bal Baljit Bal Baljit Boparai Baljit Gill Bhanwar Singh Bhupinder Pelia Bikram Shoker Bill Nijjer Bitta Toor Bobby Brock Moore Charanjit Dhaliwal Chetan Khera Daljit Mann Daljit Mundi Daljit Sarai Dalvir Chahal David Massaro Davinder Heer Daya Singh Del Bains Diljit Kamboj Dilraj Singh Dino Giacomazzi Gagan Grewal Gagandeep Singh Gary Brar Goni Gill Gurbax Mandair P a g e | 5 Gurbir Samran Gurbux Grewal Gurdeep Bains Gurdial Dhaliwal Gurdial Grewal Gurdip Singh Gurdip Singh Gurinder Ghuman Gurjeet Hundal Gurmail Chehal Gurman Chahal Gurnek Chahal Gurpal Bal Gurpinder Singh Gurpreet Singh Gurtej Singh Gurvinder Pamma Gurwinder Sekhon Harbax Sidhu Hari Sohi Harinder Singh Harjeet Purewal Harjeeven Singh Harjinder Harjinder Chahal Harkanwal Singh Harman Virk Harmin Sohal Harneet Bath Harpal Randhawa Hirday Singh Imran Mohammed Inder Singh Inderjit Bhatia Inderjit Singh Jagdeep Mandair Jagdeep Singh Jagraj Singh Jas Mandair Jasbir Nijjar Jasbir Sidhu Jasbir Tatla Jaskarn Ghumman Jasleen Gulati Jasleen Gulati Jasmeet Hundal Jasminder Momi Jasren Sihota Jasvir Dhaliwal Jasvir Rana Jasvir Sidhu Jaswant Bal Javaid Iqbal Jay Dosanjh Jay Gill Jeevan Sandhu Jesse Hundal Jetal Patel Joginder Jhattu Kamaljit Brar P a g e | 6 Kanwal Randhawa Karandeep Gill Karmjit Grewal Kashmir Gill Kavin Sihota Kewal Basi Kewal Basi Kewal Singh Khosa Gurjant Kiranpreet Kaur Kirpal Sihota Kj Randhawa Koren Sihota Kuldip Atwal Kuldip Hundal Kulwant Johl Lak Brar Lakhwinder Randhawa Mahan Nijjar Majinder Singh Makhan Singh Makhan Singh Manbirpaul Dhillon Mandeep Gurm Manhinder Dhaliwal Mani Pandher Maninder Atwal Maninder Grewal Manjinder Dhaliwal Manny Johal Mark Gustafson Mohabatpal Kaile Mohinder Sodhi Narinder Atwal Navjot Athwal Nick Ball Nick Sahota Nindi Dhaliwal Paramjit Dosanjh Parampreet Pannu Parm Randhawa Paul Gill Paul Hundal Perman Sihota Prabhbir Singh Prabhjit Hanjrah Pritpal Bhatti Priya Subramaniam Raj Dhaliwal Raj Kular Rajneesh Sharma Rajpal Dhillon Rajpal Singh Ramu Vanga Rana Chahal Randhawa Tejpal Ranjit Nagra Ranjit Singh Ravi Gondal Ricky Dhillon P a g e | 7 Rishi Sidhu Robbie Bains Robby Tut Roop Purewal Rsjinder Singh Runjit Sangha Rupinder Dhillon Saad Ismail Sandeep Dhillon Sandeep Grewal Sandeep Singh Sanjot Dhillon Sant Hundal Santokh Dhillon Sarbjit Sran Satwant Singh Savinder Virk Sharanjit Gill Shirish Shah Shivali Sharma Sidharth Bagga Simon Sihota Sohan Bhatti SP Randhawa Steve Dail Steve Kahira Sukhbir Nagra Sukhdeep Samran Sukhjinder Singh Sukhman Virk Sukhmanjit Singh Sukhpal Dhaliwal Sukhvinder Singh Sukhvir Mundi Sukhwant Dhillon Suki Rahul Sumit Sharma Suneel Sharma Sunny Shoker Suresh Bagga Surinder Atwal Surinder Bains Surinder Dhanoa Surinder Dhanoa Surjan Singh Surjit Chahal Swarn Batth Tajinder Grewal Tajinder Singh Talvinder Sodhi Tarandeep Aroea Tarlochan Grewal Tarlochan Nijjar Tarlok Singh Tejpal Singh Tirath Johal Tony Sandhu Tooba Rizwan William Wood
Punjabi American Growers Group (PAGG) WWW.PAGGUSA.COM Email: Info@paggusa.com
1 Calculated by multiplying total and the average price per pound. All data obtained through ABC publications.
2 7 C.F.R. § 981.70
3 7 C.F.R. § 981.76
4 https://www.investopedia.com/terms/c/cot.asp
5 7 C.F.R. §981.13
6 7 C.F.R. §981.16
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