From the Los Angeles Times:
“For much of the last decade, almonds have been such a lucrative crop that growers and investment firms have poured money into planting new orchards across vast stretches of California farmland.
“Now, the almond boom has fizzled and the industry has entered a slump. Prices have dropped over the last several years, and the state’s total almond acreage has started to decrease as growers have begun to tear out orchards and plant other crops.
“In a sign of the troubles besetting the industry, one large almond-growing conglomerate has declared bankruptcy.”
According to the story, “Prices for premium almonds have dropped from nearly $4 a pound a decade ago to about $2 a pound or less … Though the low prices are affecting all growers, those that are being hit especially hard are the many investor groups that bought land when prices were high and now have large debts.”
KC’s View:
While almond companies and investor groups are having liquidity problems, the Times points out that the almond industry has had other liquidity issues in California:
Over the last decade, the almond boom coincided with growing concerns about water in California. When growers and investment companies bought land and drilled wells to pump groundwater in the Central Valley, the expanding nut orchards locked in long-term water demands and added to the strains on the state’s declining aquifers.
Expectations are that the industry will come back. Hopefully they can figure out a way to do so while not putting such stresses on the water supply.
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