California’s almond industry is edging out of one of its most painful downturns in years, but a new Terrain report warns growers and handlers that the sector’s recent stability should not be mistaken for a return to the boom years.
Terrain specialty crop analyst Matt Woolf says the industry is moving from a period of below-breakeven pricing to one where prices are “at or just above breakeven,” a meaningful improvement from 2022 and 2023 but still far weaker than the economics that defined the 2010s. The shift has come after several years of orchard removals and a painful supply-demand imbalance, though some growers are now reassessing whether replanting could pencil out.
The report frames the moment through a SWOT analysis, arguing that the same forces that powered almonds’ rise also exposed the crop to a severe correction. California almonds grew from a niche crop into the state’s second-largest agricultural commodity by value, with production expanding at an annual rate of about 4.3% from 1990 to 2024. USDA’s 2025 objective measurement forecast put the crop at 3 billion pounds, up 10% from the prior year, underscoring the scale the industry still carries.
Terrain points to major structural strengths: California still produces about 75% to 80% of the world’s almonds, has a diversified export base and benefits from a dense support network of about 7,600 growers, nearly 100 handlers and a large ecosystem of bees, equipment, irrigation companies and processors. The report notes that one University of California Agricultural Issues Center study put the industry’s direct and indirect employment contribution at roughly 110,000 jobs.
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But the downturn also exposed vulnerabilities. Port congestion during the pandemic slowed shipments, built up inventories and pushed prices lower. Inflation lifted input, labor and compliance costs. The Sustainable Groundwater Management Act added a longer-term constraint as groundwater plans began forcing hard choices about permanent crop acreage. Terrain says statewide estimates suggest hundreds of thousands of acres, many in permanent crops, could be repurposed.
Trade is another pressure point. China and Hong Kong, once top destinations for California almonds, now import more from Australia, aided by preferential trade agreements. Terrain says Southeast Asian re-exports may obscure some California product flow into China, but rerouting adds cost and risk.
The opportunity side is led by India, now the industry’s largest destination, where per capita almond consumption remains far below U.S. levels. Terrain also sees room for almonds in protein-focused and health-oriented foods. But threats are rising from geopolitics, inflation, competition from oat milk and other alternatives, and the rise of GLP-1 drugs, which may reduce snacking demand.
The takeaway for growers is cautious rather than bleak. The industry’s foundation remains strong, but the next growth cycle will require more hedging, sharper market development and a harder look at water, costs and consumer trends.
