Why are nuts so expensive?

If you love nuts, and who doesn’t, then you may well have found yourself in the supermarket staring at the shelves wondering just why are nuts so expensive? Especially when you get to the rarer types of nuts like pine nuts for example the prices can get ridiculous, well there are a few simple reasons that explain simply why nuts are expensive.

Harvest per land area required

Very few nuts give a good return when you consider the amount of land required to grow them. Most nuts grow on large trees which only produce a harvest once a year. Take a look at the almond trees being commercially grown in the image below for a good example.

field of commercial almond trees

Look at the amount of space each tree takes up, then compare this with traditional crops like tomatoes or potatoes and you can easily see why nuts are going to cost more already. The average yield from a single almond tree is only 23-30kg of nuts, and they only fruit once every year. ASDA sells its cheapest almonds at 88.3p per 100g (prices correct at time of publishing) so that one tree equates to £203 to £264.90 per year at retail cost. This is the final price they will sell for, after being grown for an entire year, harvested then shipped halfway around the world. So you can see already why the price has to be high, this is before we consider that a lot of nuts will only grow in very specific conditions.

Specific growth conditions

Lots of nut trees need very specific conditions in order to thrive and be productive. Take almonds, for example, they are mainly grown in one area of the USA, and it just turns out that this area is also notorious for high land prices, California. So to add to the small yield per acre you now have to contend with that acre being a premium piece of land, costing the farmer more to operate unless they own the land outright. This, however, is not always a good thing, with crazy land prices in California large areas of the land owned by farmers has been sold to property developers, further increasing the cost of nuts.

Almonds for example require a cold, but not too cold, winter where the trees can be dormant. This must then be followed by a mild winter which allows the trees to wake up from this winter hibernation. There are very few areas in the world that provide the perfect conditions for growing almonds.

Demand for nuts

Worldwide demand for nuts, especially ones now thought of as healthy, such as almonds has been outstripping supply for the past few years. This again will increase the final cost you pay for your nuts in stores. New emerging markets such as China are also demanding more and more produce, again inflating prices.

Economics of food

This article is part of our economics of food series, check out our other articles such as why is salmon so expensive?