Great job, internet. Remember all that shit-talking you did about almonds sucking up too much of California’s drought-plagued water? Now the price of almonds is way down, and people just aren’t grabbing the nuts like they used to, causing serious damage to the industry.
It wasn’t only a bad reputation that hurt almonds. Farmers got whipped into a planting frenzy that ended up flooding the market with too many nuts. Now, the price per nut has plummeted, causing the state to lose about $1.8 billion (£1.2bn). Farmers admit they’re probably to blame, according to a report that aired on NPR:
“We probably pushed the price up too high,” says Darren Rigg. He handles over 50 million pounds of nuts with Meridian Growers in Tulare, Calif.
“It killed off demand, and people at a certain point, they just don’t buy,” Rigg says. “We’re probably coming back into an equilibrium point, but we possibly have overcorrected as well.”
Why was the United States growing so many almonds in the first place? You have to go back to the counterintuitive reason for why almonds thrived in an age of water scarcity: Because of the drought, almonds were so financially lucrative that it made sense for farmers to plant more of them, even with the extra water factored in. As Valley Public Radio reports, farmers have been tearing out other crops to make way for almond trees, which resulted in the glut of nuts. This started happening long before the drought, by the way, so some of these almond trees have yet to mature — so even more almonds are on the way.
The other big problem is that the almond industry is built on a precarious economic premise. It banks on the fact that people in other countries like China and India will pay top dollar for America’s nuts. That turned out to be not as true in 2015 as it was in 2014, and the market flooded, resulting in a plummeting price per kilo.
As Gizmodo’s Esther Inglis-Arkell pointed out to me, this is also the same kind of thing that happened when the price of wheat skyrocketed nearly a century ago. The price of wheat went up, so farmers planted more wheat to make big bucks. That sent prices way down, which meant farmers had to produce even more wheat to make money, which pushed the price down even more. Of course, farmers ended up abandoning their crops, and that’s how the Dust Bowl happened. It's is quite possible the Great Almond Crash could have the same effect.
AP Photo/Rich Pedroncelli