State can sell big almond crop: Official

The California Agricultural Statistics Service (CASS) will release next Thursday at noon the 2002 subjective California almond crop estimate. The only suspense is how close will it come to one billion pounds.

Even with a 15-million to 20-million-pound freeze loss in the Arbuckle area of Northern California, this year's crop is expected to be over 900 million pounds. It could be 950 million pounds.

Growers don't like the early season subjective estimate because if it is large, like this one will most certainly be; almond prices can go in the tank.

The crop's size is no secret because early season weather was ideal. By mid-April producers already were experiencing limb breakage. Tree breakage is expected to be a major problem this season.

Even with the large crop, nut size is not small as would be the expectation, according to Richard Kindle, vice president of operations and marketing for Gold Hills Nut Co. in Ballico, Calif., an independent packer for about 50 producers.

However, Kindle is not concerned about the size of this year's almond crop. He told growers at a Gold Hills grower appreciation barbecue recently that California can sell a large crop at “good prices” equal to or better than 2001.

And, prices for last season's crop were good at Gold Hills, which has paid growers an average of 91 cents per pound for nonpareil and 78 cents per pound for California varieties so far. Premium grower prices were eight cents above those prices. These prices represent 90 percent of the final price, which expected to be announced in June.

He believes growers can sell the big 2002 crop at prices higher than that.

“The current feeling of most packers in California is that we are not in a big hurry to jump off the cliff just because we have the potential of a 900 million pound plus almond crop,” Kindle said.

Many believe, as the almond crop gets bigger, it creates a more certainty of supply and almond users like that because it gives them more certainty of supply each year.

Kindle believes the 2002 crop average yield from 530,000 bearing acres will be between 1,700 and 1,800 pounds, resulting in a crop he estimates will fall between 917 million and 954 million pounds. If it falls within that range, it would be the largest almond crop in California's history.

“Most of us in California have realized, I hope, we can sell big crops at good returns,” he said.

Kindle points to the industry's shipping records for his optimism.

Today's projection calls for the industry to ship 897 million pounds from last year's projected 850-million-pound crop plus carryover.

“We have shipped 93 percent of the total supply of almonds, leaving only 7 percent of the supply or 60 million to 70 million pounds of carry out,” he said. This carryout out is much below normal and most industry experts say at least 100 million pounds are needed to maintain market flows.

Kindle also pointed to the fact that per capita consumption in the U.S. has increased 57 percent in the past five years, and shipments have increased 54 percent.

Kindle does not believe producers and handlers must heavily discount almonds to sell a big crop. He doesn't believe lowering the prices increases consumption.

“If California sellers hold the course, buyers will slowly realize that prices are firm and fair, and they will pay the higher prices, as long as they are confident everyone is paying these (same) prices,” he said.

Kindle told producers that a crop of 912 million pounds and a carry-in of 60 million would create a total supply of 972 million pounds.

“If we have no increase in shipments above the 2001 crop, our carryout next year would be 127 million pounds or about 13 percent of the total supply,” he said.

Shipments to grow

However, he expects shipments will continue to grow at their recent historical rate of 4 percent annually, and that would reduce the carryover in his scenario to a desirable 10 percent of supply.

Kindle said, like many packers, Gold Hills realizes a small crop typically follows a large one and that generally brings higher grower prices.

“We at Gold Hills are going to be mindful of this scenario and will be conservative in selling your almonds, knowing that we have the potential for large gains in prices after March 2003 for those willing to stay the course,” he said.

He said other “major handlers” are looking at a similar marketing strategy and therefore he does not believe a mandated reserve is necessary.

The Almond Board reserve committee meets Friday, after the subjective estimate is release, to discuss setting up a reserve.

“Most handlers will impose their own reserve” knowing that a small 2003 crop is likely and that should bring higher prices.

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