The Coming Almond Crash in California

Almond growers in California worry that the recent drop in almond prices may be a harbinger of things to come, according to National Public Radio.

Some reasons cited for the farmers’ apprehensions include:

1. Criticism leveled at the industry in recent years over the abundant use of water;
2. The tremendous growth in planting, triggered by the price of almonds soaring from roughly $2.50 three years ago to over $4 per pound in 2014;
3. The dollar’s strength vis-à-vis foreign markets, forcing countries such as China and India to pay more for almonds;
4. If El Nino deposits enough water, and the weather stays cool, the subsequent overabundance of almonds could depress the price of almonds. On the other hand, a strong storm could rip the flowers off trees, causing too small a crop, which could raise the price too high for foreign markets.

Almond growers are still making a greater profit than five years ago, but Vernon Crowder, who is part of a Food and Agribusiness Research Advisory Group, told NPR that almond prices plunged “about 20 percent, maybe just a little bit more, since late 2014.” That would amount to a $1.8 billion loss for the industry.

In the 2013 crop year, California almond revenue rose to $5.77 billion.