Almond farmers seem to have gotten ahead of themselves.
After prices for almonds climbed to a record $4 per pound in 2014, farmers across California began replacing their cheaper crops with the nut, causing a huge increase in supply. Now, the bubble has popped. Since late 2014, according to The Washington Post, almond prices have fallen by around 25%.
Part of that price drop can be attributed to oversupply. No one anticipated an almond glut, even as farmers invested in almond-tree planting frenzies.
But the other factor pushing almond prices down is the strong dollar, which made already-high prices even higher for foreign buyers. Last year, almond shipments fell by 15%, The Washington Post reported. As much as Americans love their almonds (and they do—consumption grew by 200% between 2005 and 2012), U.S. growers still export the majority of their crop.
The almond industry doesn’t seem to be too nervous about price correction so far. In an interview with American and Western Fruit Grower this week, Blue Diamond Growers CEO Mark Jansen said that supply and demand are reaching equilibrium. “We also think some of the price relief that has happened in almonds will stimulate additional demand in markets like China and India, which may have balked at the bubble prices that we saw this past summer,” he said.
The one thing he is worried about? The weather. The El Niño weather pattern has not been kind to almond crops in previous years. According to Jansen, the two most recent strong El Niño years saw almond yields drop by a third.