Almond Prices Crash
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  1. #1
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    May 2005
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    Sad Almond Prices Crash

    Almonds were at record high prices last August.

    In September demand dropped off and prices began to fall. Foreign importers (mostly middle men) began to default on their contracts. Growers and processors panicked as loads already shipped overseas were sitting unclaimed in foreign ports. Prices were slashed further in an attempt to sell these orphan loads. Confidence of both buyer and sellers vanished and prices continued to drop daily. Many contracts were renegotiated at lower prices in an attempt to prevent further defaults. Demand has been weak as no one wants to purchase a large supply of almonds if there is a chance they will be cheaper tomorrow.

    The price gains of the last five years has been wiped out over the last few months. Prices are near or below the cost of production for many growers. The odd thing is this crash wasn't caused by a bumper crop and a huge supply. The 2015 crop was just an average crop, just barely enough to cover last year's demand. Most growers thought the 2015 crop would sell for record prices.

    Steve

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  3. #2
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    Mar 2015
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    Derry, New Hampshire
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    Default Re: Almond Prices Crash

    so even though growers took a hit does that mean contracts to pollinate are paying less?

  4. #3
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    lee county, fl, usa
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    Default Re: Almond Prices Crash

    That's rough! What happens if the overseas almonds are not claimed? Do they ship back? My guess is not. Sorry to hear it.
    Pleasant words are a honeycomb, sweet to the soul and healing to the bones. Prvb 16:24
    March 2010; +/- 50 hives, TF

  5. #4
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    Default Re: Almond Prices Crash

    Quote Originally Posted by bevy's honeybees View Post
    That's rough! What happens if the overseas almonds are not claimed? Do they ship back? My guess is not. Sorry to hear it.
    Most of the overseas shipments go to major distribution hubs like Dubai or Hong Kong. The buyers there are shopping for deals and unsold containers can be purchased at bargain basement prices. Even so, prices could be lower next week turning today's bargain into tomorrow's loss.
    Steve

  6. #5
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    May 2012
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    Default Re: Almond Prices Crash

    so what happened to demand? China and the middle east have to tighten the purse strings or something?

  7. #6
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    Jan 2014
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    Default Re: Almond Prices Crash

    Hmm.. I can think of a few different motto's that would describe the situation...

    Why should this come to a shock to anyone? Did you really think a pipe dream would last forever? Give it time, the market always ebbs and flows. You just need to stay adaptive to change to keep the business going.

  8. #7
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    Nov 2013
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    Default Re: Almond Prices Crash

    Its funny how crazy the market cycles can be do to the feds involvement.
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  9. #8
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    Default Re: Almond Prices Crash

    Quote Originally Posted by hex0rz View Post
    Why should this come to a shock to anyone? Did you really think a pipe dream would last forever? Give it time, the market always ebbs and flows. You just need to stay adaptive to change to keep the business going.
    This ain't my first rodeo. I have been growing almonds for 39 years. The first (and worst) crash I experienced was back in 1981. I was young and deeply in debt. I delivered my 1981 crop to a handler that went bankrupt. It was 15 months before I got paid. I couldn't make my annual mortgage payment and I had to roll over the debt turning the unpaid interest into principal. In other words I not only increased my debt on the land but I also had to borrow money to pay my other bills. To make matters even worse the prime interest rate in 1981 was over 20%!

    I got an "off farm" job and took care of the almonds nights and weekends. I was working my butt off and was still broke. It was a tough lesson to learn. Prices dropped again in 1998-2001, and 2006-2009 but I was better prepared for it. I knew this current crash was coming but I thought it was another year away.

    The crashes in the past were followed by 3-4 years of low prices. Old orchards are pulled and very little new land is planted. Speculators head for the exits and land prices drop. There will most likely be some very good deals on almond ground over the next couple of years.
    Steve

  10. #9
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    Jun 2012
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    Suffolk Co, NY, USA
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    Default Re: Almond Prices Crash

    Sorry to hear this Steve. No telling where the ripple effect ends.
    keep your head up.

  11. #10
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    Default Re: Almond Prices Crash

    Quote Originally Posted by hex0rz View Post
    Hmm.. I can think of a few different motto's that would describe the situation...

    Why should this come to a shock to anyone? Did you really think a pipe dream would last forever? Give it time, the market always ebbs and flows. You just need to stay adaptive to change to keep the business going.
    I just love the 'words from the wise' bleacher crowd.

  12. #11
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    Jan 2014
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    Default Re: Almond Prices Crash

    ..are you saying I'm wrong about my statement?

    Have you never said the same about oil prices? Because if you have I hope you also come from an oilfield occupation.

  13. #12
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    May 2014
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    Sedgwick Co. KS
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    Default Re: Almond Prices Crash

    Quote Originally Posted by Almond Grower View Post
    This ain't my first rodeo. I have been growing almonds for 39 years. The first (and worst) crash I experienced was back in 1981. I was young and deeply in debt. I delivered my 1981 crop to a handler that went bankrupt. It was 15 months before I got paid. I couldn't make my annual mortgage payment and I had to roll over the debt turning the unpaid interest into principal. In other words I not only increased my debt on the land but I also had to borrow money to pay my other bills. To make matters even worse the prime interest rate in 1981 was over 20%!

    I got an "off farm" job and took care of the almonds nights and weekends. I was working my butt off and was still broke. It was a tough lesson to learn. Prices dropped again in 1998-2001, and 2006-2009 but I was better prepared for it. I knew this current crash was coming but I thought it was another year away.

    The crashes in the past were followed by 3-4 years of low prices. Old orchards are pulled and very little new land is planted. Speculators head for the exits and land prices drop. There will most likely be some very good deals on almond ground over the next couple of years.
    Steve, I now exactly how you feel. Although I don't raise almonds, I also try to make a living off the land....it's not always easy. Weather, government, distant markets. labor, machinery, etc. can all have an affect on the bottom line whether it's almonds or wheat, corn, soybeans, etc. I survived the 18-20% prime rate during the early 80'......barely. I had just started farming in the 70's and the crap hit the fan beginning with local hail storms and then low commodity prices & high interest. Interest is cheap for now, but I see that changing down the road..

    Best of luck to you!

  14. #13
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    Default Re: Almond Prices Crash

    Quote Originally Posted by bean tree homestead View Post
    Its funny how crazy the market cycles can be do to the feds involvement.
    What're you talking about? What recent US federal policy changes drove the worldwide almond demand and price to fall so dramatically?

  15. #14
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    Default Re: Almond Prices Crash

    Just curious - does one leave the trees in and plant other crops in between them? Does one prune the trees any differently? What is the plan of action for a grower in this case? Do you release hired help? Are your contracts half up front, half after delivery?

    Your ideas about adaptation to this farming situation would be interesting reading. Farming is one of the very difficult puzzles people play. Not trying to pick at a wound, but it is a very interesting topic, and you do have a few years under your belt.

  16. #15
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    Default Re: Almond Prices Crash

    once the trees get big enough, can't really plant between them as you can't really get equipment down the rows easily. When they're young you will see cover crops, but they get in the way for harvest.

  17. #16
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    Lake County Ill
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    Default Re: Almond Prices Crash

    Does this mean that fewer large commercial beekeepers will not be needed to pollinate the almond crops?

  18. #17
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    Default Re: Almond Prices Crash

    It's tough to say wooded, how many acreage of that variety is being put in and how much total acreage is increasing....

  19. #18
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    Default Re: Almond Prices Crash

    Quote Originally Posted by Matt F View Post
    What're you talking about? What recent US federal policy changes drove the worldwide almond demand and price to fall so dramatically?
    Its not particular to just almonds but the normal ebb and flow of market monetary tampering... but its a bit off topic.
    https://wiki.mises.org/wiki/Austrian...s_Cycle_Theory
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  20. #19
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    Default Re: Almond Prices Crash

    This is surprising to me, as an east coaster, because the news I've seen has been all about the drought, people pulling their orchards out, warnings of high prices and low availability of almonds, etc. Unless foreign sources are making up for the slack?

  21. #20
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    May 2009
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    Riverside CA
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    Default Re: Almond Prices Crash

    There has been a pretty big increase in acreage of almonds in the recent past, i think its around 900,000 from just under 600,000 about 10 years ago. I expect the yield per acre has increased as well so there must have been a fairly large increase in supply.
    http://www.almonds.com/sites/default...esentation.pdf

    Its bound to come round think of all the newly middle classes in India, China wanting to upgrade their food choices. I also heard that Paramount has recently decided to grub out quite large acreages so hopefully it may get in balance with demand again. Tough until it does though.

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