February 10, 2006

Larger Than Expected Crop and Declining Prices
The industry Position Report issued Wednesday did not provide us with any good news and in fact helped to further push the market down. So here is what we know:

• Crop receipts to-date are at 899 million pounds. This is 19 million pounds more than the 880 million pound estimate and there is the chance that this number will continue to grow.
• January's Domestic and Export Shipments were down 18.4% when compared with January of the previous year. Overall, this moves shipments 19.1% behind the 04 crop year to-date.
• CASS recently issued the Noncitrus Fruits and Nuts 2005 Preliminary Summary with an increase to bearing almond acreage. In 2004, the bearing acreage was 570,000 acres and 2005 was 580,000 acres. CASS had previously reported both these years at 550,000 acres.
• As a result of sharply declining prices over the last three months, major defaults on contracts are taking place in Russia, Greece, Italy and the UK. In addition, many are also experiencing the renegotiation of previously set contracts to a lower price.

Grower levels have continued to decline.

If you are interested in moving any of your remaining tonnage please call to discuss. And keep in mind that the attitude of the buyers has not changed - they will continue to buy only what they need and not long term.

Relationships are Everything
There is a lot to be said for reputation and business relationships. During this very volatile market situation, we at RPAC, LLC have continued to do business the way we have operated for the last twenty years and that is continuing to work with the same valuable and responsible customers year after year. As a result we are not currently experiencing the major defaults being had by others in the industry.

Trees are Blooming
The early varieties are beginning bloom with more being seen in the North and South compared to the center of the state. Weather forecasts for the next 10 days are calling for more of the same kind of weather we have seen since February 1. Please call and let us know where your orchards are at in their bloom sequence. Also, if you do not have bees yet, we have a few leads we can share with you.

As always, please call me at (209) 602-6926 if you have any questions regarding any of the above or what you are hearing in the field.

          

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RPAC, LLC

P.O. Box 2138

Los Banos, CA 93635

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