Transition from cotton gin to almond huller sign of times

California agriculture is in a perpetual state of evolution, and nowhere is it more evident than at 43890 W. North Ave., Firebaugh, Calif.

A 30-bale per hour Continental Double Eagle cotton gin operated at that address for almost 30 years. It is now scrap metal in containers on a boat to China for recycling.

Cotton module movers that carted their last large cotton bricks last fall share the 85 acres on W. North Ave. with hundreds of new wooden bins stenciled “Sierra Valley Hulling.”

The red, white and blue sign on the entrance still proclaims “This is Cotton Country.” It is no longer.

Panoche Ginning, built in 1979, turned out as many as 45,000 bales of cotton in a season. Its last season was 2007-2008, when only 5,000 bales were processed. The former cotton gin is now Sierra Valley Hulling, the newest and one of the most modern huller-shellers in California. It will process 20 to 25 million pounds of almonds this year in a facility built on the slab of the former cottonseed storage building. It is engineered to process 50 million pounds of shelled and in-shell almonds.

Five of the six principals in the new huller are all former cotton growers or past associates of California cotton.

Former gin manager and Panoche partner Ed Wandzell is now a Sierra Valley Hulling partner, huller manager and almond buyer. He has eagerly made the transition from cotton to almonds.

He compares today's almond processing to cotton ginning of old. “The cotton industry has made so many strides forward (in improved efficiency and labor savings) in the past 50 years from the module builder to the module haulers to virtual automation in the ginning industry,” noted Wandzell. By comparison, Wandzell says there are far too many people and forklifts involved in processing almonds.

“Ed is never satisfied,” laughs Dean Nelson, a partner in Sierra Valley Hulling and its sister organization Sierra Valley Almonds, Kerman, Calif. Nelson is the only partner in Sierra Valley Hulling with no cotton background.

Wandzell does not want to talk too much about changes he wants to try in almonds, but he has already concluded that 16 almond bins can be loaded on a former cotton module mover.

“You know how many people it takes to move 16 almond bins with forklifts?” pondered Wandzell. The answer is at least 10. “I figure you could do it with one person with a module mover in 30 to 45 seconds.”

Although Wandzell is rapidly adapting to his new role, the transition from Panoche Ginning to Sierra Valley Hulling was a gradual one, according to Mark Turmon, another partner in the huller and an owner of Sierra Valley Almonds along with Nelson, Mike Friedenbach, a pioneer in the almond industry, and Jean Sagouspe, a Los Banos, Calif. almond producer and president of the Westlands Water District board.

Sierra Valley Almonds is a processor, packing and marketing organization formed a little more than two years ago. It is based in Kerman, Calif.

“I have known Ed for 15 years and for probably the past 10 years we have talked about a huller trading spaces with the gin,” said Turmon, a former cotton grower who also spent five years with Producers Cotton Oil and has been a consultant with cotton merchant Dunavant of California for almost 15 years.

With the new plantings and expected continued growth in California almond production, Turmon said Sierra Valley Almonds either had to build a huller as a sister organization or sit on the sidelines while others increased statewide hulling capacity. Sierra Valley Almonds decided to toss its hat in the ring to not only fill the need for more processing capacity, but to better control the quality of products it markets.

The transition became feasible when a couple of partners in Panoche Ginning got out of cotton and wanted to sell out. A partnership of Wandzell, Turmon, Nelson, Sagouspe, and two other large growers, Todd Henry and Sano Brothers, bought the property and created Sierra Valley Hulling, LLC.

As has been the case with several large, newer almond huller-shellers in the state, the feedstock for the start-up comes from the grower-owners.

Turmon said the huller partners will deliver about 15 million pounds from 8,000 acres of older and younger trees this season. These orchards are in the Firebaugh/Mendota area of the West Side of the San Joaquin Valley.

Turmon hopes the huller-sheller will process a total of 20 to 25 million pounds this season.

“With a capacity of 50 million pounds, we are looking for new growers and new product to hull and shell,” said Turmon.

“Most every huller is full right now with the increasing production, except for Superior Hulling. This was another reason to put the huller in this season,” said Turmon.

Superior Hulling, a 60-million pound capacity opened last year also on the West Side of the valley, is tied in with Panoche Creek Packing Corp., also in Kerman, Calif.

Turmon declined to reveal the investment in Sierra Valley Hulling. Superior cost about $11 million to build from scratch, according to its owners.

Sierra's huller/sheller is the melding of the “best equipment available from multiple vendors. It is state of the art equipment with a lot of innovations,” according to Nelson, former chairman of the Almond Board of California.

For example, Nelson said sophisticated electronics cleaners are used to clean as much foreign material as possible from shelled and in-shell almonds and give growers a high turnout.

“A lot of hullers have to slow down when hulling for in-shell. We can run at the same speed for shelled and in-shell products,” said Nelson.

In-shell is a growing market for the California almond industry, especially in India and China.

“In-shell is tariff-driven in those two countries. They want to create jobs for people to hand-shell almonds, and they place a high tariff on shelled almonds,” explained Nelson.

In India where the middle class population is now equal to the entire population of the U.S., almonds are part of the culture and religion. India is a rapidly growing in-shell market that already is taking 100 to 125 million pounds per year of California almonds. “In-shell to India is a fabulous market,” said Nelson.

“We want to deliver a very high turnout of very good quality almonds for growers who process their crop through this new huller-sheller. Quality has always been important to the industry and will only become more important as production continues to increase,” said Nelson.

Sierra Valley Hulling has divided up its 54-acre almond storage yard into 64×32-foot storage piles. “We want to be able to segregate varieties for each grower with easy movement of trucks in and out of the storage area,” said Nelson. Sierra Valley will provide trailers for its growers to haul almonds to the new plant.

California almond growers are expected to deliver another record crop this season, 1.5 billion pounds from 660,000 bearing acres. It will be the sixth billion pound crop in the past seven years.

“When I started in the industry in 1997 the crop was like 750 million pounds and that was it … the industry could not sell more than that. A billion pound crop would break the industry was what many were saying,” said Nelson.

Not only have those doomsday prophets been proven wrong, growers' prices have been profitable through each one of those 1-billion pound crops, thanks to an aggressive marketing effort by the Almond Board. Nelson said grower prices still hover around the $2 per pound mark for this year's production with another crop record to be broken.

A look at Almond Board shipment records for the 2007-2008 crop show record monthly shipments both domestically and overseas.

“The industry is shipping at an overall annual rate of 17 percent more than last year. The health message about almonds is resonating around the world. Domestic consumption has doubled,” said Nelson.

While continued strong grower prices are driven largely by demand, Nelson hastened to add that there is another, less compelling but ominous reason for strong prices for the large 2008 crop. It is a dwindling supply of irrigation water.

California is in the midst of a political/judicial as well as a natural drought and surface water supplies have been cut dramatically to growers in irrigation districts from Tracy, Calif. to Bakersfield, Calif., the heart of the state's almond industry.

“Buds are now being set for next year's crop and any deficit irrigation, especially post harvest, can have a significant impact on next year's crop,” said Nelson. High grower prices now are at least partially reflecting the concern that it may take a significant carryover from the 2008 crop to make up for a short 2009 crop.

“I do not see a big drop in yield for this year's crop,” said Sagouspe. “Whatever water growers have is going on trees and vines … at the expense of abandoning cotton, tomatoes or other crops.”

Many new wells were drilled over the past year in anticipation of short water supplies, but high salts and boron in much of the well water is not good for almonds. “Well water is more suited for more salt-tolerant permanent crops like grapes, pistachios and pomegranates. Almonds are not very salt-tolerant,” said the veteran grower.

It requires about four acre feet of water per acre to produce an almond crop.

There seems to be nothing but continued good news for the California almond industry on the marketing front. However, plantings have slowed and much of that is due to justifiable concerns about water supplies.

“The outlook for water supplies from the state and federal water projects is real dismal for the next 10 years,” warned Sagouspe.

“After this year we can expect to see historic lows for surface water supplies. We could start 2009 with zero water allocation from the federal water project. If it is real wet this winter, we may get a 25 percent to 30 percent water supply next year,” said the Westlands board chairman.

The Los Banos, Calif. producer said many farmers over-planted almonds and other permanent crops, counting on buying water from Northern California or row crop growers who are more willing to sell water than to use it for cotton or other crops. “The problem with that is the condition of the Delta. You cannot move water through the Delta without a peripheral canal. There is no water to buy south of the Delta.

“It has very little to do with rainfall or snow pack. It is a conveyance problem. We have plenty of storage, but we cannot move it even if we have it in Northern California,” he said.

The Delta gridlock is partially due to environmental rulings to protect fish. Pumps to move water south have been shut down or throttled back to protect the endangered Delta smelt.

It may not be a very optimistic water supply outlook for an industry with almost 100,000 acres of nonbearing orchards planted and annual crops of 1.7 billion pounds or more on the horizon. Nevertheless, one of the most successful crops ever in California continues to move full speed ahead in the ever-evolving California agriculture.

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