Almond Pricing

Looking at almond prices for the last five years, growers received $1.65, $2.30, $3.00, $2.15, $1.85 per lb for the years 2003 - 2007, respectively.  For 2008, prices will come in at about $1.50 or less.  The high of $3.00 per lb in 2005 was due to a short crop.  Decreasing prices have been the result of an unprecedented three consecutive years of records crops.  These record crops have been accomplished by increased acreage and increased yields per ac. 

Today, the almond industry harvests 660,000 bearing acres.  Ten years ago there were 442,000 bearing acres with an average yield per ac of 1,720 lbs.  The industry broke through the 2,000 lbs per ac barrier in the year 2002.  For the 2007 - 2008 season, the average yield per ac was 2,267 lbs.

Almond acreage has increased partially due to growers replacing annual crops and lower value crops with the higher valued almond crop.  There has also been changes in planting geography, with almond growing shifting southward in the Central Valley of California.  Five counties in the Southern San Joaquin Valley now produce 75% of all almonds, with the Sacramento Valley contributing just 16%. 

Yield per acre has improved thanks to many years of successful research into almond production practices resulting in improved management methods.    Additionally, bee flight hours for the high- producing Southern San Joaquin Valley area, have favored successful pollination.  Cumulative bee flight hours for the last three years of record production have been 150% over the cumulative bee flight hours of the previous four year period (2002 - 2005). 

Crop size for the 2007 - 2008 season will come in at around 1.5 B lbs.  This is an all-time high, on top of records for the previous two crops of 1.4 and 1.1 for crop years ending in 2007 and 2006, respectively.  Production in excess of 1.3 B lbs is expected through 2011.  

A discussion of almond pricing is incomplete without reference to the global economy.  The vast majority of almonds grown in California are exported to more than 90 different countries around the world.  Europe imports a significant 40% of California's almonds.  The dollar has appreciated by 20% against the Euro - from $1.60/Euro earlier in the year to about $1.25/Euro presently. 

Input Costs

Input costs have risen dramatically for almond growers.  Potassium was difficult to procure at any cost this year.  The fertilizer, CAN 17, had windows of a month where it was unavailable last year.  Sulfate of Potash (SOP), has risen from $350 to $1,050 per ton over the last three years.   That equates to $400 per acre of application.  Fortunately it doesn't require application each year, perhaps once each five years, but depending on soil quality, many growers cannot raise almonds without supplemental potassium. 

The cost of bee colony rentals has risen from $50 per colony a five or six years ago to over $150 per colony recently. 

Steel for news wells is up, plastic pipe for irrigation is more expensive.  Fuel costs were up the first half of this past year. 

Water Availability

Water availability and cost are the wild card for California almond growers.  Since the last significant drought, there are an additional 6 M people in the State of California.  Lake Shasta is at its lowest level since 1991.  Court rulings associated with the Endangered Species Act (ESA) have limited surface water.  Meanwhile, groundwater tables are falling.

One-third of the State's almond acreage is affected by decreased water allocations for the Southern San Joaquin Valley.  Currently they are at 15% allocation, and under the best of scenarios (i.e., a much higher than normal rainy season) may only receive a 40% allocation.  These allocations are the result of a federal judge in Fresno ruling that water exports from the Delta do not offer enough protection for the endangered species, the Delta smelt.   The affect on California agriculture is significant; farmers are cutting back on farming other crops such as cotton and grains and fallowing land to redirect water to almonds.   But almonds are affected too.   Older and less productive orchards are being abandoned and new plantings have virtually stopped.  

Bee Health

Bees are stressed due to pests and diseases, poor nutrition and being transported across the country to service pollination needs.  Varroa mites continue to be a problem, Nosema seems to have a role in declining bee health, and Colony Collapse Disorder (CCD) has decreased available bees for pollination.  

Summary - Bees will Compete with other Inputs during this Economic Squeeze

What does this mean for the bee industry?  There is a squeeze on the economic threshold for inputs.  Bees are competing for almond growers' money the same as water, fertilizer, chemicals, labor, fuel, equipment and all other inputs at a time when prices have dropped from $3.00 to $1.50 per pound or less.  Almond growers will re-evaluate stocking rates for colonies, considering the loss of the incremental benefit of additional bees vs. the impact on increasing costs per acre.

Practically speaking, the beekeeper and the grower must maintain an on-going dialogue.  Have your contracts in place, and hope for rainfall.