March nut drop clouds early-season almond crop, price prospects

March nut drop clouds early-season almond crop, price prospects

“Apparently, a lot of the nuts that we thought were fertilized weren’t.”

Following February’s fast but heavy bloom, California almond growers saw the potential for producing a large crop this season.

However, that was before a surprisingly high number of small nuts or newly-formed ones that never grew out of the jacket, began dropping in March.

Despite good overlap of flowering among the different varieties of trees and favorable weather for bee activity, the short bloom may have limited the number of pollinated flowers.

This differs from the shedding of larger nuts, usually in April and May (the so-called June drop), which stop growing as part of a natural thinning process to reduce competition.

“Apparently, a lot of the nuts that we thought were fertilized weren’t,” says Paul Ewing with RPAC, LLC, an independent almond processor based in Los Banos, Calif.

“That’s made it tough, right now, to assess the likely size of this year’s crop.”

Presumably, a moderate 2016 crop would help end the nightmarish plunge in almond prices which growers have endured since September.

“They remember the 2005 crop, when prices began free-falling in November, dropping about 40 percent before they started to recover five months later,” Ewing says. “This is much worse. Currently, almond prices are 50 percent to 60 percent below their level in August.”

The steep price plunge has also been more painful in another way, he notes. Following the 2005 harvest, almond prices fell steadily. This time, they have done so in teasing stages.

“Every four to six weeks or so since September, we’ve seen one-week periods of good buying activity,” Ewing says. “This has given growers and handlers a temporary, but false, sense of hope that the market is firming up.”

Meanwhile, growers, reluctant to sell much volume at the current lower price levels, continue to hold a significant number of almonds off the market, says Ewing. However, as a result of the light demand, the relatively few growers and handlers in the market have offered sufficient product to keep prices stable.

Nevertheless, RPAC sees the potential making of a rebound in almond prices on the horizon.

“We’re already seeing the first signs of demand growth in emerging markets like Eastern Europe, the Middle East, India, and other parts of Asia,” Ewing says.

“The growth may become even more apparent, if we can get past more time of relatively stable pricing. As more buyers in established markets like Western Europe and North America have worked through high-priced inventory, we expect some growth in these regions as well.” 

Meanwhile, until the likely size of this year’s crop becomes more apparent, growers remain uncertain, hoping for a slight or even moderate rise in prices, but recognizing the possibility for the market to remain soft in the near term.

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