California almond prices see big drop in recent months
Jan. 31, 2016
MODESTO, Calif. (AP) — Almond prices in California have dropped significantly in the past few months, giving environmentalists hope the slump will halt orchard plantings but experts say the industry's long-term prospects remain strong.
A farmer who could sell a pound of almonds for nearly $5 last summer is now getting as little as $3.10.
Farmers say a downturn was inevitable after years of rising prices and an explosion in production. The slowing down of economies in large world markets such as China has also contributed to the drop in prices, the Sacramento Bee reported Sunday (http://bit.ly/1OZDbFT).
"We hit record price levels, and at some point the elastic breaks," said Mike Mason, chairman of the Almond Board of California and a grower in Kern County, home to one-fifth of the state's almond crop. "Everybody expected that we would have a price correction."
But the drop in prices doesn't mean the almond industry is coming to a screeching halt.
Prices have stabilized in recent weeks and even today's lower prices are above the average for the past decade, and almond farming remains profitable for most growers, said farm economist Vernon Crowder, a senior vice president at Rabobank.
A slowdown would be welcome news for many environmentalists and other Californians who argue farmers have no business planting trees in regions of the state that are naturally arid and rely on water delivered by canal from Northern California.
"It hardens the demand for water exports from the Delta," said Barbara Barrigan-Parilla, executive director of an advocacy group called Restore the Delta. "Hopefully, (the price decline) will stop the rush to plant thousands more acres of almonds in desert areas where almonds should not be grown."
Almond industry officials counter that farmers are using water much more efficiently and that it makes a lot more sense to use scarce water supplies on a high-value crop such as almonds.
Almonds remain California's No. 2 agricultural product, after the dairy industry, and are the state's leading farm export.
The price correction came faster than most analysts expected, but Crowder and others said the lower prices have customers warming up to almonds again.