Answer: Members of the prunus family (almond, peach, nectarine, etc.) are subject to a fungal disease commonly called gummosis. It sounds as though your tree is fully involved, beginning with the graft. The powdery material are the fruiting spores of the fungus. Wind, insects, and splashing water can help spread the infection, so remove the spores as best you can, or spray with a copper-based fungicide. Read and follow label directions; multiple applications may be required.
Trees under stress are quick to develop insect and disease problems. Don't overwater or overfertilize (these promote rapid but weak growth), and keep lawn mowers and weed whackers a suitable distance away from the bark of the tree.
Hope your tree regains its health!
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