Almond prices have reached a record high this week, just ahead of the busy holiday nut and dried fruit season starting next month.
There are many reasons for the increase in almond prices, however, the most prevalent is due to the lack of water in the California growing regions. Not since the early 1900’s has California seen so little water. Reservoirs most commonly filled by winter ice melt and spring rains has received neither – in the past two years. Nut, grape, and other farmers have resorted to digging more wells, over pumped the aquifer, and lowered the levels of available groundwater. Growing almonds takes about 4 acre-feet of water (enough water to cover one acre with one foot of water) annually. This year, most farmers were lucky to have supplied even 1 acre-foot to their orchards. The result is that that many of the harvested nuts were either shriveled or small, lacking the maturity obtained in full-water years.
Additionally, there has been significant demand placed on California almonds (California supplies 80% of the world’s supply) over the past decade. Shipments to China, India and the Middle East have soared and current demand shows no significant downturn in shipments. Domestically, almonds are now used not just as a snack, but as an ingredient in breakfast cereal, milk, and thousands of commonly used consumer food items each day. The California almond supply is now estimated to reach about 1.8 billion pounds for its 2014 crop, about 14% lower than originally estimated before drought concerns became a reality. This squeeze between lowered supply and increased demand has created an additional push on almond prices lately.
This may not be the end, however. Many farmers are worried about the lack of fall rains and the risk to the ground water supply for the 2015 crop. Without significant water from Ice melt or fall rain, the almond prices that farmers may face the worst growing conditions that they can remember.