Almonds, the beloved snack that recently overtook peanuts as the most consumed nut in America, might have gotten a little too popular for their own good.

After years of steady price increases, thanks in large part to skyrocketing demand, the protein-packed nut has suddenly become much cheaper. Almond prices, which reached record highs early last year, have fallen by roughly 25 percent since late 2014.

“They dropped a lot faster and further than anyone had expected,” said Vernon Crowder, who is a senior analyst at Radobank, a food and agribusiness research firm. “Last year, the average price was about $4 per pound. I would guess that’s down to around $3 today.”

The price plunge, while a welcome bit of news for almond eaters, is putting strain on an industry dealing with suddenly lower prices. And it’s also exposing the complicated and often unpredictable circumstances that dictate why certain nuts cost what they do.

Before almond prices fell, they rose to record highs, selling for as much as $5 a pound for premium varieties. The rise had a lot to do with demand, which grew by more than 200 percent between 2005 and 2012.

But it also had to do with water — or really the lack thereof.

Almonds are a famously water-intensive crop, requiring more than a gallon of water per almond. And California, which is responsible for producing roughly 80 percent of the world’s almonds, has endured a crippling drought over the past few years. That has put a terrible strain on local nut farmers, who, without steady rainfall, have found themselves with fewer nuts than in years past.

For almond growers, this hasn’t been a huge problem. They sold fewer nuts but made up for the harvest shortfalls by selling them at a premium — a simple adjustment to the shift in supply. They also passed the cost of the irrigation needed to combat the drought onto consumers. And everyone paid the extra bit, at least at first.

“Agricultural products tend to be inelastic,” Crowder explained. “When the supply shifts, the price changes accordingly, because people still buy more or less the same amount.”

In the case of almonds, volume sales fell by about the same amount as the crop yield fell, but dollar sales remained strong. People, in other words, bought the almonds that were available, as they had in the past, but paid more for each because there were fewer.

But then the American dollar began to strengthen, turning high but manageable prices into headaches for anyone purchasing almonds abroad. Between 60 and 70 percent of almonds produced in the United States are exported, the vast majority of which go to Europe and China.

“It was unfortunate for the industry,” said Crowder. “Buyers didn’t respond well to the high prices. We know some products were dropped or switched out — some mixes were adjusted to use less almonds.”

A significant portion of almond sales goes to food manufacturers, who chop, slice and crush them into various candy bars, trail mixes, cakes, pie crusts and other desserts. And this is where companies have skimped out. Total shipments of almonds fell by 12 percent last year, while exports fell by 15 percent, according to the most recent numbers released by the Almond Board of California.

The icing on the cake, however, came this past fall, when last year’s crop turned out to be far bigger than expected. Many new almond trees had been planted in recent years, as farmers switched out less profitable crops. But conditions were such that no one expected there to be such a glut.

Buyers here in the U.S., anticipating a smaller crop, committed to pay more than they should have. Buyers abroad, meanwhile, began to walk away from deals they had made at prices they no longer wanted to pay.

“The whole entire industry has dealt with a lot of defaults out of India and Dubai,” Darren Rigg, a nut farmer in Tulare, California, told NPR syndicate Valley Public Radio last month. “Guys going out of business, guys not picking up loads. And some of them just packing up shop and running off to the Himalayas. And so we still have cargo at foreign ports.”

The Financial Times, which wrote about the international backlash recently, put it even more grimly:

“Last year’s surge in prices depressed demand, and buyers in China, the Middle East and India, who have led consumption over the past three to four years, have disappeared. Trading has ground to a halt as prices continue to decline and the number of rejected containers by buyers refusing to honor contracts has jumped.”

With extra almonds on hand and even fewer people to buy them, the industry has had to sell its nuts for less money, or sit on them until prices rebound.

“There’s a little bit of a ‘hey, let’s wait and see what happens to prices’ attitude out there right now,” said Crowder. “Especially because of El Niño, which could either hurt or help the industry.”

The weather pattern, which is expected to bring far more rain to the motherland of almonds than in years past, is creating some optimism ahead of the 2016 crop. If that pans out, and demand doesn’t rebound, it could cause an even further drop in almond prices. But there is no assurance that it will.

Over time, Crowder, who believes the price has bottomed out, expects the market to correct itself.

“Land is pretty scarce here — water, too,” said Crowder. “It’s going to be hard to flood the market again. This was a very specific scenario, which is why everything happened so quickly and was so unexpected.”

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