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Updated: Dec 22, 2022

When I wrote my first almond pollination outlook post this time last year, the world was still shrouded in uncertainty. Vaccines had only just started rolling out and lockdowns were finally being lifted. There was a collective hope that we’d soon conquer COVID and things would begin returning to “normal.” But for almond growers, COVID hardly ranked among their top concerns heading into 2021. There were other, more pressing issues to tackle like water and other existential crises facing California agriculture.

But in 2022, COVID is threatening to introduce new challenges that may exacerbate the issues that already existed for California growers. Water issues—which have gotten so bad that some growers were forced to remove healthy orchards last year—might not even be the biggest concern for almond growers in 2022. Just as we’re seeing in countless other industries, supply chain challenges are beginning to impact almond growers.

COVID drove almond prices down

Last summer, we heard story after story warning of massive gridlock in the global supply chain. Around the same time, USDA released a report projecting a 10% decrease in the 2021 almond crop compared to the prior season. In normal circumstances, this decrease in production would drive up prices for almonds.

Almond production, 2014-2021 (source: USDA)

But growers don’t get paid unless almond buyers—over 66% of which are located overseas—receive their shipment. With ports around the world in a state of disarray, almond shipments stalled. Just as prices for almonds were beginning to climb up thanks to the USDA report, they took a nosedive as sellers struggled to deliver shipments to buyers.

The latest market figures depict an unsettling scene. Prices are hovering around $2/pound, which is the lowest they’ve been in nearly 10 years. Almond shipments are down nearly 15% compared to 2020, with exports down more than 19%.

Almond market prices, past 20 years and past 5 years (source: Derco Foods)

Results & predictions

In last year’s pollination outlook post, I anticipated that almond growers would look to slim down their budgets in 2021. What I didn’t anticipate was how quickly this would take place or how extreme the cuts would be. Though I only have anecdotal evidence, it seems that more than a few growers made (or at least considered) the difficult decision to remove healthy orchards because they couldn’t acquire the water to sustain the trees.

Though this trend is likely to continue or worsen in 2022, orchard removals did not appear to have impacted the market for almond pollination. Hive prices are up again this year, suggesting that orchard removals did not result in a significant dip in demand for hives. However, average price per hive doesn’t tell us the whole story—it leaves out key details like how many hives are rented.

Demand may in fact be decreasing, and the increase in price could be a result of a shift in pollination strategy. With growers beginning to think in terms of frames per acre rather than hives per acre, prices for high-strength hives may jump rapidly as growers try to rent the fewest number of hives needed to achieve optimal pollination.

Final thoughts

There’s no shortage of compelling storylines to follow as we proceed into the new year. As costs continue to mount, growers are desperate for almond prices to climb back up. But prices are being held down by the same problems that are driving costs up. Until solutions to water issues and supply chain challenges are discovered, the almond industry is stuck in a classic Catch-22 situation.

If you’re tired of reading my posts about water, you’re in luck. Supply chain issues might take center stage this year—though water issues aren’t going away anytime soon. I’ll be keeping a close eye on almond prices throughout the year. If they’re trending up, I expect things to be business as usual next season. If prices remain low, I expect things to become a bit chaotic.

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