Almond Review - Feb 2015

Today the Almond Board of California released the January 2015 position report.  

Jan shipments were 115 million lbs. vs. 160 million lbs. last season - down 28%

Domestic shipments were up 1.6%

Exports were off 42.3%

DEMAND:  

Shipments are down 14% for the season, with domestic basically flat and exports off nearly 20%

We saw heavy buying interest starting around second week January as buyers returned from the holidays. The strong demand pushed pricing up about .15/lb. and steady demand in recent weeks has brought stability to the market.  

Commitments were 519 million lbs., up 15.7%.

For the first time this crop year, commitments are running ahead of last year, and unfortunately it is largely due to port congestion.

PORT CONGESTION:

The west coast congestion and labor situation has worsened significantly during the past month, which contributed to the very poor shipment numbers in January.  At one point we and many handlers couldn't ship almost anything via Oakland and had several weeks of production stacked up at our warehouses.   Below are some before and after photos to give a visual perspective on the congestion.

Before the port congestion issues.

Before the port congestion issues.

Recent photo of the port congestion.

Recent photo of the port congestion.

THE 2014 CROP:

Crop receipts rose 33 million lbs. to 1.838 billion lbs.

THE 2015 CROP:

Bloom is underway or about to start in much of the state.  With the warm weather, we should see things progress quickly.  Rain events are in the forecast starting in about 10 days.  

The trees seem to have received sufficient chilling hours this winter.  The bud set is varied throughout the state.  

We anticipate some increased production potential & acreage from a very significant amount of 3rd leaf acreage, a good amount going 3rd to 4th, and a some going from 4th to 5th (2011 plantings). We are also seeing more acreage removed than normal, due to the drought.  If pricing were not at such highs, we would see much more removals.  

 

OUTLOOK:

Assuming a final crop of 1.88 billion lbs. and similar carry-out of 350 million lbs., the industry is approximately 78% sold or shipped.  With six months to go, this is quite high.  

If shipments for Feb-July 2015 were flat vs. last season, we would have a carry-out of approximately 400 million lbs.  If shipments continue off 14%, we will ship about 1.664 billion lbs. and carry out over 500 million lbs.  

These are unprecedented times in our industry, where the drought concerns have continued to trump traditional supply/demand fundamentals.

The low water situation is unfortunately made worse with decisions by the governor's appointed State Water Resources Control Board, which are reducing water flows from the delta to water districts south of the delta that depend on this water.  This recent decision was even contrary to a supporting stance of fish agencies and federal and state project operators.  For more information we encourage you to read the attached Water Ruling News

As these political decisions continue to affect all of us, we encourage you to write to the elected officials on how this is affecting your business.  

Click here to write to Governor BrownSenator Diane Feinstein, Senator Barbara Boxer, Congressman Jim Costa

For more info on California's water supply please see attached Water Supply Update  

Posted here is the January 2015 Position Report

The next position report is due for release Wednesday March 11 

Please feel free to contact us with any feedback or questions.

Paul Ewing      Dennis Soares