A Nutty Demand and Supply Story
Our almond story starts on the demand side in China with a name change. Just like apricot kernals, California almonds had been called xing ren until the apricot kernel growers accused the Americans of “deceiving consumers.” Trying to minimize a marketing crisis, the California Almond Board responded with a new name, 巴旦木 (bādànmù), the phonetic translation of a Farsi word for almond.
A perfect example of lemons becoming lemonade, the new branding is helping to buoy sales. Now, with no chance of a mix-up, almonds are clearly associated with US production and the quality standards sought by the Chinese consumer.
Also on the demand side, in the US, almond consumption is increasing. Confirmed by a November article in the New England Journal of Medicine, nuts are associated with a wide range of health benefits.
Meanwhile, on the supply side, drought in parts of California–the source of 82% of the world’s almonds– and rain in Spain–the world’s second largest almond grower- have meant a smaller almond crop this year.
The result? Demand shifts to the right, supply to the left, and price goes up.
Actual almond farm prices per pound:
Sources and Resources: For all you ever wanted to know about almond demand and supply and more, the California Almond Board presents the details. I do also recommend articles on Chinese almond demand in the NY Times and foodbusiness.com, and this description of the branding crisis.