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Statement on Salmonella and Food Safety
5/24/04 Billion
Pound Crop Estimate 7/1/03
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Shipments reported for June 2006 were approximately 80.38 million lbs. This is approximately 21.58 % above the June 2005 figures. Prices increased approximately .30/lb. following last month’s shipping figures and since then prices for the 2006 crop dropped back to around the same levels as our last report one month ago. The disparity has widened to around 1.00/lb. between the two crop years. Approximate market levels prior to the crop forecast and shipping figures were: 2005 crop NPS 25/27 AOL – USD 3.60/lb. - 792/220 FAS California Carmel SSR 25/27 AOL – 3.40/lb. – 748/220 Cal SSR 27/30 AOL – 3.30/lb. – 726/220 STD5 – 3.20/lb. – 704/220 2006 crop NPS 25/27 AOL – 2.60/lb. – 572/220 FAS California Carmel SSR 25/27 AOL – 2.35/lb. – 517/220 Cal SSR 27/30 AOL – 2.30/lb. – 506/220 STD5 – 2.20/lb. – 484/220 The margins between the varieties and qualities have changed again for 2005 crop as re-sellers have been selling off positions of STD5, BWB and other commonly traded items. We have been receiving a lot of feedback from customers that it is cheaper to buy locally from local traders and wholesalers. The re-selling of inventory and paper positions slowed down sales at the handler level during the past few weeks. Though, somehow the uncommitted levels for current crop are showing at only 63.04 million lbs., 32.35% less than last year’s uncommitted inventory at that time. Some of the committed shipments will ship in August and even September, so the carry-in should be more like 100-115 million lbs. on August 1. 2006 CROP DEVELOPMENT: The weather has continued to be favorable. In the central part of the state, the Stanislaus and Merced counties, we still have not seen much hull split. We are hearing similar reports from other regions of the state. Our main indicator of the crop’s expected harvest timing is the hull split of “blanks” (fully-formed hulls without a viable kernel inside). Blanks generally split 7-10 days earlier than normal hulls do. Since we have not even seen much splitting of blanks, the crop looks to be at least 7-10 days late. However, the crop could still make up some time with very hot weather, advancing maturity and drying the kernels quicker. Kernel size development has been better than expected, and NASS’s findings show sizing just 12% below the 2005 crop.  SUPPLY & DEMAND ANALYSIS: 2003 Crop 2004 Crop Carry-In 162.04 Million lbs. Carry-In 148.9 Receipts (Net) 1011.14 (1032.94 Gross) Receipts (Net) 958.116 (998.038 Gross) Total Supply 1173.18 Total Supply 1106.8 Shipments 1024.28 Shipments 984 Carryout 148.9 Carryout 137.68 2005 Crop –Estimated Final Figures 2006 Crop – Preliminary Estimates Carry-In 137.68 Carry-In 106.83 * Receipts (Net) 883.44 (910.758 Gross) Receipts (Net) 1018.50 (1050 Gross)** Total Supply 1021.12 Total Supply 1125.33* Shipments 914.29 * Shipments Carryout 106.83 * Carryout * Estimate only. Assumes shipments increase in July by 10% versus the previous crop year. If they stay the same, shipments will reach 908.80 million lbs. If they increase by 20%, shipments will reach 919.77 million lbs. **Estimate only. Assumes crop size is in line with NASS’ objective estimate. COMPETING NUTS: Approximate market levels of some competing nuts are below. The most notable change in the last year has been the major drop in hazelnut pricing. Hazelnuts, Turkish 11/13 – USD 1.80/lb. Cashews, 320’s, - 2.35/lb. Pistachios, USA RSIS EXT NO. 1 21/25 - 2.80/lb. Walnuts, USA LHP 20%, - 2.85/lb. Macadamias – 3.50 to 4.00/lb. Pecans, USA Fancy Junior Mammoth Halves, - 4.40/lb. DEMAND: California’s monthly shipment figures have been better than the same months with the 2005 crop for the past four months – please find below chart:  CONCLUSION: NASS’ crop estimate of 1.05 billion lbs. was fairly in-line with what the industry was expecting and seemingly neutral news. It’s approximately 3% higher than the subjective estimate was. The shipping figures were expected to be high, but it seems most did not expect this high of shipping figures nor this low of uncommitted inventory. We appreciate the feedback we have received from customers. What we have most commonly heard is that pricing for Cal &Mission types in the 2.00 to 2.30/lb. (440 to 506/220) price range still work well for both end-users and consumers, but that beyond that range, lost demand for the industry and lost opportunities for our customers begin to take place. Currency rates certainly affect this tolerable price range in different countries. Even if that 2.00 to 2.30 range is really the perfect pricing to ship 1 billion lbs., it takes so long for increased (or decreased) market pricing at the handler level to work its way to the consumer and back to the handler level to reflect the decreased (or increased) demand, we could easily experience pricing well above or below that range for 3-6 months or more. The next news will not be until around this time next month when the July shipping figures are released. At that time we should have a better idea of the crop timing and expected kernel sizes. Best Regards, Paul Ewing Director of Sales Hilltop Ranch, Inc. For more information, contact Paul Ewing directly. Previous Market Reports: ©2006 Hilltop Ranch, Inc. |
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