After three years of drought, farmers in U.S.’s biggest agricultural producing state could lose $5 billion on lost revenues because of lack of water. As of February 18th 91% of California was in ‘severe’ drought compared with 24% a year earlier and 68% was rated as ‘extreme’. Some almond growers are needing to tear up older trees as water costs have increased to $500 per acre foot from $330 per acre foot. Processors are paying prices that are 20% higher than the average $2.58 for the twelve months ending July 31, 2013, and export prices were up 27% in December 2013 from a year earlier according to the U.S. Department of Agriculture. California shipped a record 588.4 million pounds of almonds in the twelve months ending July 31st – up 94% from 2006 and over the past ten years worldwide retail sales of all packaged nuts more than doubled to $16.3 billion in 2013 with the U.S. accounting for one quarter of sales. In the past year almond prices in India have increased 39% and are 83% higher than five years ago. Since 2009 California has doubled its almond shipments to China to 208.2 million pounds in 2013. The predicted reduced almond supply from California could be good for the world’s second largest producer, Australia, which is estimated to see a harvest of 173.3 million pounds equaling last year’s record harvest.
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