Almonds go through processing and sorting at Travaille Phippen almond farm in Manteca (San Joaquin County).

Almonds go through processing and sorting at Travaille Phippen almond farm in Manteca (San Joaquin County).

A stack of full almond crates in a warehouses at Travaille Phippen almond farm in Manteca (San Joaquin County).

Scott Phippen shows packed bags full of almonds that are ready to be shipped at Travaille Phippen almond farm in Manteca (San Joaquin County).

An almond tree at Travaille Phippen farm in Manteca (San Joaquin County).

MANTECA, San Joaquin County— Scott Phippen looked up at the almond tree on his farm and said something farmers rarely say.

“These trees appear to have a good crop on them. And we really don’t need a good crop,” said Phippen, a third-generation farmer who grows 2,500 acres of almonds within 20 miles of this tree. “We kind of need a mediocre crop.”

Phippen’s dark humor was a response to the crisis that’s undercutting California’s largest agricultural commodity. The problem: Farmers are growing a record amount of almonds, but can’t get many of them to overseas markets. That’s a problem because the industry exports roughly 70% of what it grows and about 80% of that haul flows through the Port of Oakland, according to the Almond Board of California.

At least that is the way it is supposed to flow.

Between August 2020 and February 2021, the state shipped 1.25 billion pounds of almonds. The problem is intensifying this year, as the state exported just 993 million pounds over a similar time frame, according to the Almond Alliance of California, an industry advocacy organization.

Growers don’t get paid until buyers receive their almonds, and now the nuts aren’t making it to their destination. That has triggered a ripple effect that has cost the industry $2 billion since September when the crisis intensified and the price of almonds dropped roughly $1 a pound, said Aubrey Bettencourt, president and CEO of the Almond Alliance, an industry advocacy group.

“That’s $2 billion lost to our businesses, to our farms, to our workers, to our communities, to our tax base,” Bettencourt said. “That money is gone.”

The money may be gone, but the almonds are still around because, unlike many other agricultural products, they don’t rot in a few months. Ask Phippen. He’s got 40 million pounds of almonds sitting in warehouses on his property. That’s almost as much as the nearly 50 million pounds he sold last year — and another bumper crop is coming in October.

“I can’t get them out,” Phippen said as he looked around the two-story high warehouse. “I can’t turn them into money.”

This surplus won’t necessarily translate into lower prices for U.S. consumers, Bettencourt said, as the nuts on the shelves in local grocery stores are still subject to overhead costs in the domestic market.

The almond backup has its roots in the pandemic, which triggered a huge spike in the demand in the U.S. for imported products that Americans were buying while stuck in their homes. U.S. imports increased 18% in 2021 over the previous year, according to the National Retail Federation, as the nation’s ports handled more shipping containers than any year since the organization first started monitoring incoming traffic in 2002.

The demand has been so great that there weren’t enough shipping containers to transport goods back and forth from foreign ports. Shipping companies found it to be quicker — and more lucrative — to send back an empty container than it was to wait around for it to be filled with, in this case, almonds.

While similar factors are affecting other U.S. exports, this imbalance particularly hurts industries like almonds, as most of California’s almonds are shipped overseas to China, Japan and the Middle East. Exports typically account for half of the container traffic through the Port of Oakland, but last year it dipped to 45%, according to the port.

Some overseas carriers that stop first in southern California ports “are skipping Oakland and they’re just going directly back to Asia without without taking agricultural products with them,” said Port of Oakland spokesman Robert Bernardo. In February, the port announced it was building a 22-acre pop-up terminal solely dedicated to exports in the hope of speeding up the process and making it more attractive for carriers to pick up freight there.

Rep. John Garamendi, D-Walnut Grove, who has co-authored legislation to address the issue, said someone asked him recently if “supply and demand would solve this problem.

“And I said it is the problem,” Garamendi said. “The supply of containers is unequal to the demand.”

Or, as Phippen quipped: “You know what the No. 1 export of the United States is over the last few months? Air.”

Complaints about the empty containers “in general are not wrong,” said Mike Jacob, vice president and general counsel of the Pacific Merchant Shipping Association, which represents foreign and domestic carriers. “But they have to be placed in context.”

First, Jacob said, there have long been empty containers on cargo ships headed east — the U.S. has been exporting air for years to some extent because of the country’s foreign trade deficit. The practice increased in recent years and became more noticed when U.S. imports increased nearly 20% during the pandemic and gridlock tied up West Coast ports.

Carriers needed to keep vessels moving, even if empty, “to prevent more gridlock,” Jacob said.

The backup is hurting many who work in the almond industry, which like many other parts of the agricultural sector of the economy, is getting crushed by other economic factors as well. The price of fertilizer is going up, in part because Russia and its ally Belarus supply up to one-third of its key ingredients. Russia suspended its exports last month.

Throw that on top of rising inflation, skyrocketing gas prices and California’s ongoing drought as other factors crushing the ag business. Bettencourt worries that the state could start seeing some of its smaller almond farmers fold.

Many California almond growers are like Donny Hicks, who owns an 18-acre almond farm in the Stanislaus County town of Hughson and is feeling the impact of the backup in a different way. Almond growers need the revenue earned from the previous harvest to perform off-season maintenance on their trees in the off-season to the tune of $3,000 to $4,000 an acre.

“That’d be your fertilizers, nutrients to the trees, water,” Hicks said. “But we need money to pay for this. We’re not getting a check from our processors right now and it’s got everybody in a bind.”

Some help may be on the way. Garamendi co-authored the “Ocean Shipping Reform Act” with Rep. Dusty Johnson, R-S.D. Garamendi said the measure would give more power to the Federal Maritime Commission to greater regulate carriers so that “trade would be reciprocal.”

“A shipping company that wants to bring goods into the United States must be equally willing to take American exports from the United States,” Garamendi said. “That is not the case today because of the economic advantage of turning those containers around empty.”

Garamendi’s legislation passed the House by an overwhelming, bi-partisan margin and a similar measure is moving through the Senate. He expects to have a merged version of the measure on President Biden’s desk by May. However, even if it becomes law, its provisions may not take effect until next year.

Until then, Phippen has tons of almonds to try to get on ships. He figures he needs to ship 100 containers of almonds a month for the next few months to be ready to handle next year’s crop. Given his firm’s recent shipping history, that looks doubtful.

“I would be hard pressed to do 50% of what I needed to do in the next five, six months unless I find another way,” he said.

Joe Garofoli is The San Francisco Chronicle’s senior political writer. Email: jgarofoli@sfchronicle.com Twitter: @joegarofoli

Joe Garofoli is the San Francisco Chronicle's senior political writer, covering national and state politics. He has worked at The Chronicle since 2000 and in Bay Area journalism since 1992, when he left the Milwaukee Journal. He is the host of "It's All Political," The Chronicle's political podcast. Catch it here: bit.ly/2LSAUjA

He has won numerous awards and covered everything from fashion to the Jeffrey Dahmer serial killings to two Olympic Games to his own vasectomy - which he discussed on NPR's "Talk of the Nation" after being told he couldn't say the word "balls" on the air. He regularly appears on Bay Area radio and TV talking politics and is available to entertain at bar mitzvahs and First Communions. He is a graduate of Northwestern University and a proud native of Pittsburgh. Go Steelers!