2020 brought on unexpected issues for many industries, although the year started out hopeful. Agriculture was affected in various ways, and every commodity had its own struggles, from short supply to lower prices. The almond industry in California saw lower prices late in 2019, at about two dollars per pound, but farmers saw a continual decline in price at the start of the year. While some farmers were able to lock in prices around one dollar and eighty-five cents, others saw prices as low as one dollar and forty cents.
COVID-19, trade wars, and rising production all impacted the industry, and some experts believe prices won’t recover for a few more seasons.
2019 saw an increase in almond prices until it was clear that crop estimates were higher than expected. This rise in yield estimates combined with trade wars between China and India, which are two of the largest foreign markets for U.S. almonds, and a subsequent hit to international transportation due to COVID-19, caused prices to drastically drop early in 2020.
Almond harvest begins in august for most farmers, but the majority of producers already locked in prices earlier in the year. It is only once the huller has picked up the nuts that farmers know what their exact yield is and therefore know how much they made per pound.
Farmers usually set their prices long before august, agreeing to a contract with their purchaser before harvest season arrives. Since prices were so low earlier in the year, some farmers decided to hold onto their crop rather than selling it. While this is rare, farmers can store their crops in warehouses for a certain length of time, meaning that they can wait for higher prices before selling their nuts. This isn’t ideal for many reasons, but it is a last-ditch effort for farmers who face selling products in a difficult market. This allows them time to find a purchaser to pay more or wait for the market price to rise again.
The agricultural industry has been thrown many curveballs in recent years, and the pandemic added to the negative streak farmers and ranchers have been experiencing. While prices are low, experts are hopeful that there is a light at the end of the tunnel. Once there is a handle on the virus and tariffs are taken care of, trade will open up and the market will stabilize, offering increased prices in the near future.