Almond market the next local bubble.

Almond prices peaked a few years ago @ $3.96 per lb and are now hovering around $1.87 per pound. It looks like some suckers have also joined this party just a bit to late to enjoy the fruits (nuts) of their labor! Good luck John Madden!

hat tip to Lander:

The Wall Street Journal as an update on the developer turned almond grower:

Greg Hostetler is a real-estate developer who builds subdivisions in California's Central Valley. But the past few years, he's gone nuts. To be precise, Mr. Hostetler has been building a sideline in almonds, spending $60 million to buy and plant 4,500 acres of trees since 2000. This year, he plans to shell out at least another $5 million to plant an additional 1,000 acres. "The almond market is looking a lot better than the housing market right now," he says.

Mr. Hostetler isn't the only newcomer jumping into California's almond game, where orchards now stretch down the Central Valley from Red Bluff in the north to Bakersfield in the south. In the past few years, doctors, lawyers, pension-fund managers and pro football Hall-of-Famers, among others, have all snapped up farmland in the state to plant almonds as world-wide demand for the nut has grown by 11% between 2001 and 2006. And despite some concerns on the horizon, many of the newer growers remain optimistic."

Everyone knows that almonds are a great investment," says Monterey, Calif., restaurateur Dominic Mercurio, who has teamed with football commentator John Madden to purchase nearly 400 acres of almond orchards, spending more than $3 million since they bought their first 25 acres in the late 1990s.

But many of the people jumping into almonds are doing so even as prices for the nut have been sliding...In a classic agricultural cycle, high crop prices resulted in a rush to plant trees, leading to a market glut of nuts...All of this has roused the ire of some longtime almond farmers, who say the newcomers are driving up land values and driving down nut prices.

Mr. Hostetler, the Central Valley real-estate developer who is now planting more almond orchards, says his $60 million investment in the nut so far is "a little better than break even," but he'll know more after this year's harvest ends next month.

Mr. Hostetler, who still spends three-quarters of his time in the property business, says he isn't worried about the huge quantity of almonds slated to fall from the trees this season, or the thousands of acres being planted with new trees this year. When he drives his pickup truck out between the dusty rows of trees, he says he sees nothing but bounty and profit on the horizon