Bumper almond harvests in California, a key supplier to the global market, set against a global economic downturn, have seen prices slipping for the almond heralded today for its cholesterol-free and low saturated fat status.
"During the past several months grower prices for almonds have slipped from a high near $4 a pound in 2006 down to a dollar a pound or less," says the California Farm Bureau Federation.
Bakery and snack makers impacted by soaring almond, walnut and pistachio prices in recent years will welcome the opportunity to reap savings in key raw material costs for their formulations.
Record harvest
In 2007, for example, shelled almonds pulled in prices of $1.87 a pound (€1.19).
But looking towards 2009, with California Farm Bureau Federation deeming the 2008/09 almond year as "the largest crops in history", prices - if not continuing to dip - should remain stable.
In a report published at the end of 2008 the US Foreign Agricultural Service, citing statistics from the USDA/National Agricultural Statistics Service, projected almond production in the US would rise by 8 per cent on the last season to a record 680,400 tons.
The FAS pitched total global production of almonds to hit 975,200 metric tons for the 2008/9 marketing year, a figure that includes harvests from all other almond producing countries: Turkey, the EU-27 bloc, Chile, China and India.
Market background
When compared to 2004 and 2005 that saw the industry paying some $2.21 (€1.41) and $2.81 (€1.71) respectively per pound, prices in 2007 were stable - thanks to a booming crop - and offered some relief to the food industry.
Brought to California by Spanish explorers, by 2000 the area had become the world’s leading supplier of almonds, a mantle it can still claim. While the US is still the largest market for the Californian almonds, approximately 70 per cent of California's almond crop is exported, accounting for about €1.46 billion($1.9 billion) in international sales.
Following the soaring prices of 2003, 2004 and 2005 that saw almonds reaching $8,400 (€5,384) a tonne, in an effort to control supplies and stabilise prices, the almond marketing order established the almond reserve.
In years where large almond crops are expected to significantly depress prices, the almond reserve can require a percentage of almonds be withheld from handling and diverted to low paying secondary outlets.
Favoured for use in confectionery products, Germany and Spain represent two of the biggest markets, mostly exported as shelled almonds, for California.
Nut ingredients
According to the US Department of Agriculture, as per capita income rises in developing countries, global market conditions for almonds become more favourable since countries enjoying greater prosperity can opt to introduce almonds into snacking and confectionery formulations.
In the US, the majority of almonds are consumed as ingredients in manufactured goods, including cereals, snacks, confections and desserts, with remaining consumption coming from snacking.
And when prices dip, almonds are an increasingly attractive option for food makers compared to competing nuts that may demand higher prices.
India has emerged as one of the fastest growing markets for in-shell almonds, which – with cheaper labour costs – shells and processes the nut ingredient for domestic use in food applications.
The healthy option
Currently, attracted by their healthy Vitamin E, mono-saturated fat status, almonds – pitched at the premium end of the nut market – are enjoying growing popularity from the eagle-eyed health-conscious consumer.
Recent research from market analysts Mintel shows consumers are increasingly turning to seeds, dried fruit and nuts to fill the gap between mealtimes, pushing sales of those snacks to the £0.5bn (€0.7bn) mark, with 50 per cent growth in the category since 2001.
Sales of luxury nuts - Brazil nuts, walnuts or almonds - have almost doubled in five years to £189m (€281.82m) and, in 2005, overtook peanut sales.