Just three months into the new crop year, California’s almond growers continue to enjoy a bullish market – one that’s likely to last at least through the 2014 crop.
Shipments of 2013 crop almonds from Aug. 1 – Oct. 31 were running 7 percent ahead of the same time a year ago. In fact, October shipments were the industry’s highest ever in a single month.
“Those are surprisingly strong shipments given the high prices of almonds,” says Paul Ewing, sales manager for almond processor Hilltop Ranch, Inc., Ballico, Calif.
First-quarter shipments of the 2013 almond crop to U.S. buyers were up nearly 9 percent compared to the same period last year, he says. Meanwhile, during this same time-frame, new-crop shipments overseas markets included those to Europe, which are expected to be up over 2012, due to this year’s small Spanish crop; India, where shipments have declined by 19 percent due to devaluation of the rupee and the high price of almonds prices; and China where October shipments were off 26 percent from October 2012.
“It appears that the current high prices of almonds are starting to impact that market,” Ewing says. “But overall, the demand situation is very positive for the 2013 crop.”
At the present rate, total shipments for the current marketing year are likely to exhaust the 1.9 billion meat pounds of almonds California growers appear to have produced this year, he notes.
That’s slightly above the 1.85-billion-pound figure reported by the National Agricultural Statistics Service in its July 1 Objective Estimate of this year’s almond production. Last year’s crop totaled 1.89 billion meat pounds.
Earlier this season, growers were anticipating a much bigger crop, more in the range of 2 to 2.1 billion meat pounds But that was before the impact of a month of unusually hot weather following bloom in reducing yield potential was apparent.
Still, Ewing says, his company’s growers report Nonpareil yields were up about 13 percent over last year. He attributes this increase to last year’s relatively light crop, which allowed trees to build up reserves for this year’s higher production. At the same time, the pollinator crop was down about 5.5 percent, as these trees recovered from their heavier crop of 2012.
In early November, prices to growers for their 2013 almonds were holding steady at an average of more than $3 per meat-pound. “This is the third back-to-back year of strong prices,” Ewing says. “That’s pretty unbelievable.”
However, growers are seeing an unusually widespread in these prices. In the case of Nonpareils, for example, prices have been ranging from about $3.00 to $3.85 per pound.
Such a variation reflects the early spring heat which stunted nut development, resulting in some of the industry’s smallest kernels in 40 years.
For example, the size of Butte-Padre, a small nut producing variety, usually averages about 30 to 34 nuts per ounce for their growers, Ewing says. This year, the count was as low as 45 per ounce.
Typically, the nut count of one of the larger nut varieties, Monterey, is about 23. This year, 27s were the most common for their growers.
This year’s shortage of surface water in a number of almond orchards plus uncertainty about the availability of water for next year have already prompted limited trading in the 2014 almond crop at prices similar to those of this year’s crop, he reports.
“Right now, those concerns are very bullish in the price outlook for almonds,” Ewing says.
Meanwhile, California’s almond acreage continues to expand as growers seek to capitalize on the attractive returns from almond production over the past decade or so.
“It seems like growers have been planting new almond orchards at record rates in recent years,” Ewing says. “A lot of these trees are going into areas, particularly on the east side of the San Joaquin Valley, where they have the necessary water. Also, new growers are entering the industry as they diversify out of dairy and other less profitable agricultural markets.
Typically, after being planted as one-year old seedlings, almond trees start generating a positive cash flow in the fourth year, Ewing notes. This year was an exception.
“With the perfect bloom and near-record prices, some orchards are already beginning to pay for themselves in just their third year,” he says.
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