Today the Almond Board of California released the February 2014 position report.
February shipments were 149 million lbs. vs. 160 million lbs. last season.
Down 6.7% Overall.
Domestic shipments were up 26.1%
Exports were off 18.8%
DEMAND:
The U.S market is up an incredible 13.5% for the season. The health message is driving this, as consumers are increasingly aware of the benefits of eating almonds.
Exports are slightly off for the season. Western Europe (up 26%) is helping make-up for China (off 31%) and India (off 29%).
In the '04 crop year when prices nearly doubled by about 2.00/lb., shipments to China were off 27%. India seemed to get through that season by buying early. In the '05 crop year, when prices started off at record highs, Indian shipments were off 24% for the season. This season is an example of how price elastic the emerging markets remain, especially when comparing to the US and the EU. Russia is off 21% so far and was off 12% the '05 crop year.
THE 2013 CROP:
Receipts reached 1.99 billion lbs. with Nonpareil receipts at 797 million. This is the most Nonpareil in history. We expect a bit more to trickle in.
THE 2014 CROP:
For many orchards, the bloom conditions were excellent. This is far too early to guesstimate the crop size but we will make some general comments.
The strongest overall crops look to be in Carmel, Monterey, Wood Colony, etc. We say "overall" because there are some very strong Butte/Padre crops, but it really depended on the timing of an orchard's bloom. Some orchards were in full bloom during the middle of the late February storms and those growers are concerned. The Nonpareil were very strong in our center area in '13, went into bloom with a weak bud set and thus came out with what look to be mediocre and spotty crops. On the west side and southern areas the Nonpareil crop is reported to be much better.
While it feels like spring weather lately, we are not out of the clear yet regarding frost. It is forecast to get down to the low 30's F in some areas in the middle of next week.
WATER:
There are more unknowns about water than in our industry's history. Some growers in the driest areas are worried about their trees surviving, let alone producing a crop. We hear reports of wait times of more than one year to put in new wells in the southwest part of the state. This is a very serious issue involving politics and weather, both of which nobody can really predict. What we do know is that the outcome of the various water struggles could sway this crop by several hundred million lbs.
OUTLOOK:
Water concerns are keeping some sellers off the market for new crop. It's trading at a discount to current crop with limited activity.
For current crop, the market is soft and fairly quiet. As we often see this time of year, following an apparently good bloom, there are some sellers that just want to move product and this pushed current crop STD5 down from the high 3.40's to the 3.30-3.35 range. NPS 23/25 is reportedly in the 4.20 FAS range, just 5 cents off the highs, though pricing is sloppy.
An industry-wide concern continues to be the drought's impact beyond the '14 crop year. Even if we experience El Nino conditions (very wet) next winter, buds for the '15 crop will already be developed. Additional bearing acreage and 3rd leaf acreage will help '14 production and even more in the future.
The next position report is due for release Thursday April 10.
Thank you for your interest. For any questions or comments please call or write to paul@voyagerfoods.com