Bee Thieves! “Smart Hives!” Growing Almonds is Nuts

The “greatest pollination event on the planet” is about to kick off in California’s Central Valley. Here, 80% of the world’s almonds are produced, and nearly half are exported to other countries. It’s a $3.5 billion dollar business, and it only happens with the help of bees.

A bee at Ryan Jacobsen’s almond grove/CNBC

Nearly two million hives are being transported here from all across the country for pollination. That’s about 90% of the nation’s commercial bees. On average, a grower needs two hives per acre, and those hives can cost up to $300 apiece.

“It’s been a tough couple of years in the California almond industry,” says Ryan Jacobsen, a fourth generation grower who also heads the Fresno County Farm Bureau. As we stand among his acres of almond trees just starting to bloom, he tells me that the challenges have been a combination of foreign trade issues — especially tariffs in India — and last year’s weather. “It was an extraordinarily wet year in California during pollination for these particular trees around me.”

The bees are already arriving. They are a commodity so valuable that it’s not unusual for hives to be stolen. Last week, thieves took off with 96 hives in the middle of the night, a huge loss for their owner, a bee operator out of South Dakota. “It made national news,” Ryan says.

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I was up in almond country to cover the World Ag Expo for CNBC in the town of Tulare. It’s the largest farm show in the west, with over 100,000 visitors expected to descend on the region to see the latest and greatest in farm equipment.

The annual expo is a very big deal. The only hotel room I could find was one hour north, in Fresno, where room rates were jacked up 50% this week to $300 a night. The place was sold out. “This is our biggest week of the year,” the desk manager said.

I talked to marketing guys from Deere and New Holland at the show, as they’re pushing ever smarter and more autonomous farm equipment. It’s a tough sell right now. Most crop prices are down, tractor sales in the U.S. are down, and American farm incomes are predicted to be down for the second year in a row.

USDA

Some of the equipment on display at the expo costs well over $300,000, but these new machines can save a farm money over the long run with increased efficiencies. They also reduce wear-and-tear on the farmer by taking over some tasks.

But farmers like Ryan Jacobsen aren’t in a spending mood yet. “We have to be able to pencil it out,” he tells me.

At the same time, some farmers with existing hi-tech equipment want to force manufacturers to open up proprietary software so they can repair machines quickly in the field. Otherwise, farmers often wait days or weeks for an appointment at an authorized dealer who may be several miles away.

A group of farmers is suing Deere in federal court for the right to repair equipment, and a judge ruled the lawsuit can proceed. Their lawyer tells me he’s seeking class action status.

Then there’s the proposed right-to-repair legislation introduced in Congress. “We have a huge vulnerability, and a lot of farmers have ended up with a $250,000 piece of equipment that’s just yard art,” says Rep. Marie Gluesenkamp Perez, D-WA, one of the bill’s authors. She and her husband operated an auto repair shop before she ran for office.

Such legislation has been proposed in the past, but it’s never succeeded at the national level. A handful of states have passed right-to-repair laws for cars, but Colorado is the only state that’s done it for farm equipment. Manufacturers argue that they need to protect their intellectual property, and they also want to maintain good relations with their authorized dealers.

So sales of old tractors (like, really old) have become popular online. They can be fixed with a wrench.

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But back to almonds and bees…

One company at the Expo is BeeHero, and it exemplifies everything that’s happening on the cutting edge of ag tech.

“We are redefining pollination,” says Tim Sawyer, the company's head of marketing. He says the pollination industry is still doing business the way it has “since the Langstroth hive” was patented over 150 years ago. (Today I learned…)

Israeli-based BeeHero has created small sensors that attach to hives and can monitor health in real time through temperature, humidity and sound. Sawyer says, “Every colony has a unique ‘acoustic signature’ with a throbbing hum.” (Today I also learned…)

He estimates that BeeHero has sensors in 100,000 hives this year. Those bees are being transported to California on large trucks and will be delivered to orchards up and down Highway 99 at night, “because otherwise, the bees would fly away, right?” (And today I learned one more thing…)

Sawyer claims that since BeeHero’s first harvest four years ago, it has doubled its footprint in California, to 220,000 acres. The company has raised about $60 million from investors and hopes to eventually go public. Sawyer declined to talk about when the company might be profitable.

BeeHero doesn’t charge the beekeepers who use its technology, nor the almond growers. I had to ask “How do you make money?” about four times before I finally got an answer. The company takes a cut of the money growers pay bee owners. How much? “I don’t know if I’m allowed to say,” Sawyer tells me. Fair enough.

Ryan Jacobsen has heard of BeeHero, and he likes the idea of getting more information without paying extra. He’s not using it — yet — but it’ll be interesting to him and others to learn what the technology teaches them. Do they need fewer hives if the hives are healthy? (That would not be in the interest of the bee owners, right?) Do hives with BeeHero technology pollinate more almond blooms? Are they faster?

He remains hopeful that the next almond harvest will be better than the last. The California crop next year is expected to top three billion pounds, according to analysts at Rabobank, which would match 2020’s record. Analysts also predict that demand will more than keep pace with rebounding supplies, especially as India has reduced tariffs.

So now Ryan is focusing on another problem with another crop. He grows wine grapes, but fewer people are buying wine (another story for another time). He’s going to rip out his vines and go back to a different grape that helped put Fresno on the map: raisins.

“Farming without a profit is gardening,” he says.

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Fun fact:

My great-uncle had an almond “ranch” in Turlock, California. He called them “amonds,” without the “L.” A lot of growers do. Why? Because growers harvest the nuts by jiggling the trees. This “shakes the ‘L’ out of ‘em.” I also learned there’s a mysterious Mason-Dixon Line of sorts in the Central Valley where the nuts are called “amonds” in the north and “almonds” in the south. You can thank me for this useless trivia next time you’re struggling to make chitchat!