Current Market Report

Market Report Archive

Quality at Mt. Satake, Jan. 2007

Statement on Salmonella and Food Safety 5/24/04

Ewing Appointed Head of Sales 3/29/04

FDA Approves Qualified Health Claim 7/16/03

Billion Pound Crop Estimate 7/1/03

Letter to the trade 1/10/03

Market Report – February 9th, 2007

Per the latest Almond Board of California position report: 

Offers from re-sellers have added supply onto the market and kept demand slower at the handler level while pricing has been fairly stable for the past month.  Today we received news that the January shipments and the crop total have reached new records! 

SHIPMENTS/DEMAND:

This season’s shipments are up 27% vs. last season and up nearly 11% versus the averages of 2003, 2004, and 2005.

We think the extensiveness of the recovery in demand has surprised many in the industry.   Numerous end-users set prices with the retailers at the beginning of the crop year when pricing was .30/lb. lower than today, and decreasing, and it seems that the rise in prices has not trickled down to the consumer level much yet.   In some overseas markets such as Hong Kong and India, many importers have been working through their lower priced inventories before looking to buy again.   In-shell shipments are up 88%, with most of the growth coming from India.

THE 2006 CROP:

Receipts as of January 31st were 1.092 billion lbs, above the original NASS estimate but just below their recently revised estimate of 1.095.  More should continue to trickle in.

The rains we experienced in the later part of harvest caused more chipping and scratching during the shelling of some lots of the later varieties and also more imbedded shell. As a result, producing the low foreign specs is more of challenge with some varieties this season and Carmel U.S. No. 1 and some other specs are in shorter supply.

COMMITMENTS:

The industry is approximately 73.7% committed or shipped.  Uncommitted inventory is down 8.7% from the same time last year.  To allow for a minimal carryout as we had with the last crop, there are a little less than 200 million lbs. to sell from the handler level until we get to new crop.

THE 2007 CROP:

The almond trees received more than sufficient chilling hours this winter, which we believe is causing bloom to start 1-2 weeks later than last year – where we had an early bloom. So far we have not even seen signs of stray bloom.  The bud set overall looks very good, with the exception of some Nonpareil orchards that produced large ’06 crops. 

Dry weather up until early this week (January was one of the driest on record and in some areas, the driest) is causing small impacts on the almond orchards.  It has made mummy removal more difficult, which could slightly impact quality.  And for the orchards where growers did not or could not irrigate, it should only slightly slow the trees’ growth but not have noticeable impact on the crop size. 

There could be an oversupply of beehives this bloom but not likely an oversupply of bees.  The varroa mites are an ongoing problem and bee quality reports are mixed so far. 

ALMONDS & WALNUTS:

We used NASS statistics for grower returns to compare the price fluctuations for walnuts and almonds.  The figures for walnuts are just estimations, as we tried to come up with shelled equivalents (from NASS’s in-shell figures) to better demonstrate the fluctuation in comparison with shelled almonds.

Both almond and walnut growers have benefited greatly from the rapidly increasing awareness of the health benefits in recent years and we believe the above graph reflects this (in 2003 for example, the FDA approved the first qualified health claim for nuts).  While the trends have been similar, those in the walnut industry have experienced much more stable pricing.  We think several factors contribute to this including the fact that walnuts are “more of an ingredient,” there is less call pool marketing in their industry, they have a price leader, and there is less speculation in the walnut market. 

CONCLUSION:

Pricing for the 2007 crop and to some minor extent remaining 2006 crop pricing will hinge on the weather for the next 3-4 weeks.  Good weather would put downward pressure on pricing, although continued strong shipments would moderate the downward pressure and cause sellers to be hesitant to lower prices.  Poor weather would likely bring many buyers back to the market and put upward pressure on pricing.  The 15-day forecast currently calls for three days of rain, 10 days of nice warmer weather to induce bloom, and then more rain and cooler temperatures starting February 21st.  While much attention turns to the bloom, it will be several months before we have official production or acreage estimates.  Looking forward, some dates to keep in mind:

May 1 – NASS will publish its report with estimated acreage for the 2006 & 2007 crops.

May 9 – NASS is expected to release the subjective estimate for the 2007 crop.

June 29 – NASS is expected to release the objective estimate for the 2007 crop.

Previous Market Reports:

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