Almond Review - March 2015

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

February shipments were 139.9 million lbs. vs. 149.3 million lbs. last season.

Down 6.3% Overall.  

Domestic shipments off 9.5% 

Exports off 4.4%

DEMAND:  

Shipments were at the upper end of industry expectations.  Some of the product held up by port issues made it out, especially during the second half of the month.  China, which is off 24% for the season, was up 173% for the month.  Shipments to the United Arab Emirates were up 90%. 

New sales during the month were low, but commitments are still up 15% at 445 million lbs.

THE 2014 CROP:

Crop receipts reached 1.85 billion lbs.

THE 2015 CROP:

Bloom began early this year.  Many growers saw weak or uneven bloom in their Nonpareils.  There are also some reports of early leafing out, which is a sign of potentially a weak crop in those trees.  Generally the bloom on the pollinators looked good.  Some Fritz, Avalon and other varieties began blooming early on the westside, which is a sign of stress.  There generally was a good pollination overlap, with the exception of these early varieties and the late blooming Padre.  Bee activity was very good but down from last season.  

Similar to the 2014 season, signs point to an early harvest and one with potential nut removal issues in some orchards due to varying maturity.  The past harvest was the worst we have seen in terms of almonds left in the trees unharvested, and growers will need to work hard to control insect damage this fall.  

Nutlets 2015 03.jpg

 

OUTLOOK:

The industry is approximately 70% sold or shipped on the total supply of 2.16 billion lbs.  Assuming a carry-out of 400 million lbs.,  the industry is approximately 85% sold or shipped.

The much stronger USD is a concern. The below reflects the development of pricing buyers have paid for Nonpareil 27/30 in Europe over the past 9 months.                  
                        
                 USD/LB.    USD/EURO    EURO/LB.    PERCENTAGE INCREASE        
June 2014    3.85              1.36               2.83            
Sept 2015      4.5               1.31                3.44                        21.3%        
March 2015   4.5               1.07               4.21                         22.4%        
                         

While the pricing in USD to sellers in California since June has only risen 17%, the pricing paid by European importers has seen a cumulative increase of about 48%, due to the stronger USD. 

While there are concerns about demand, and bloom weather was generally very good, there continue to be serious concerns about the impact of the ongoing drought on this year's crop,  Some districts on the East side of the valley, which historically had very plentiful water supplies, offering very limited water or in some cases no water, to their growers.  

The market sentiment seems fairly neutral following today's report, and we see uncertainty in the market typical for this time of year.

For more water related info please see attached Water Supply Update  

Posted here is the February 2015 Position Report 

The next position report is due for release Friday April 10

The subjective crop estimate release is scheduled for May 5.

Best regards,

Paul Ewing      Dennis Soares