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Statement on Salmonella and Food Safety
5/24/04 Billion
Pound Crop Estimate 7/1/03
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Market
Report - April 8th 2005
Shipments reported for March 2005 were
75.28 million lbs.
Overall shipments for the crop year are up by just 0.3% U.S. CROP UPDATE: Crop expectations have worsened over the last four weeks. The Nonpareil variety continues to look poor throughout the valley. We expect this variety to be off by about 25% state-wide next year. Even the Butte and Carmel varieties in some areas now look disappointing. CASS recently adjusted bearing acreage estimate for the following crop year at 550,000 acres, slightly down from their last estimate of 555,000. Our current estimate for the crop is 900 million lbs. PRICING UPDATE: New crop prices have essentially come up to the same levels as current crop, and in some cases higher. The spread between Nonpareils and other varieties has widened. We think more snack companies will consider using Carmel/Monterey types and these will carry a bigger premium over other California varieties. New crop Nonpareil prices seem to be in the 3.90 to 4.00/lb. FAS range and Cal STD5 has varied from 3.40 to 3.50 recently. This morning Cal STD5 traded at 3.45/lb. for prompt shipment. We believe the premium for large sizes will decrease or be eliminated as new crop arrives, as we’re expecting large kernel sizes. SUPPLY & DEMAND ANALYSIS: 2002 Crop * Adjusted September 9, 2004 by the Almond Board, reflecting 2.11% loss & exempt versus usual forecast for L&E of 4%. This added 19.55 million lbs. to the supply beginning August 1st 2004.
Shipments 1000 ** ** Assumes 263 million lbs. of shipments from April 1- July 31, a 9% decrease from the prior crop year. 2005 Crop – Very
Preliminary Estimates Assuming above preliminary supply estimates, shipments will need to decrease by at least another 10% during the 2005 crop year. The Mediterranean crops should help offset the significantly lower supply from the U.S. next year. Total U.S. supply will likely be about 130 million lbs. less, assuming above estimates, and we think the offsetting by Mediterranean crops could be 50 to 75 million lbs. SUBTITUTION ALTERNATIVES: Prices of competing nuts remain high. We’ve continued to hear from snack manufacturers world-wide that they’ll be using more cashews and fewer almonds in their nut mixes. A freeze occurred in Iran this week, which is firming up the market for pistachios of both U.S. and Iran origin. Hazelnut prices for “current crop” still remain significantly higher than almonds, but expectations for next year’s Turkish hazelnut crop remain very optimistic. If hazelnut prices become lower than almond prices, it could help decrease demand for almonds, mainly in Western and Eastern Europe, due to substitution in both the snack and confectionery industries. OUTLOOK: On May 11 the subject crop estimate will be released by CASS (California Agricultural Statistic Service). Assuming no major surprises with this and the objective estimate in June, we expect prices to remain fairly high throughout 2005. A growing concern is the effects we could have going into the 2006-07 crop year with a potentially 1.2 billion lb. crop, after knocking demand back down to the 900 million lb. range. We could see the market fall in about 9-11 months if we have good bloom conditions to add to the increased bearing acreage. For the short term supply will likely continue to become even tighter, with only 201.1 million lbs. unshipped and uncommitted as of March 31st. Prices may continue upward and we expect a very difficult transition into the new crop year. Best Regards, Paul Ewing Director of Sales Hilltop Ranch, Inc. For more information, contact Paul Ewing directly. ©2005 Hilltop Ranch, Inc. |
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