Monday, June 11, 2007

Dear Friends:

Almond prices have drifted down .30/lb for both 2006 and 2007 crops in the past 2 months, most of it since the subjective crop estimate of 1.31 billion lbs a month ago. Market has been quiet so prices are not well defined even today. 2007 crops came down to about a level of USD 1.70 for Std -- what Calif suppliers have been willing to offer. There were occasional trades lower than that but most suppliers refused to sell below that level and sales mostly came to a stop. Buyers continue to bid and request new crop contracts, but sellers seem to be .05 to .10/lb apart. In the case of 2006 crop, sales continued but at steadily lower levels because of the motivation of sellers to reduce inventories before the lower priced 2007 crop is harvested. In fact, 2006 prices are coming closer to 2007 prices than they were 2 months ago—the differential has gone from .40 to .50 range down to the .25 to .30 range.

May shipments were 77 mil—3 mil off from last year’s record 80 mil. 2006 crop shipments to date are still at a record level and will finish at about 1.05 billion lbs and leave a carry out of about 150 mil—similar to recent years. For next year, however, we expect a 10% increase in shipments, leaving over 250 million carry out for July 31, 2008. I have been saying for years that the industry needs this level to maintain supply continuity to buyers during the crop year transitions, AND to moderate price fluctuations that have hurt suppliers as well as users in the past years. The extra carry over will be a challenge to the 60+ commercial sized processors and their growers to be patient and willing to carry a 12 month inventory.

USA, Canada & Mexico almond buyers need to decide if they want to become a “DV User” and certify that they do their own pasteurizing. It is not worth the trouble unless you pasteurize a large volume by blanching, oil roasting, moist heat treatment or PPO fumigation. You may also need to keep separate inventories of pasteurized and unpasteurized almonds. First step is to identify a “process authority” or microbiologist that can validate your process. He or she can be approved by the Almond Board quickly. Next you will need to appoint a process auditor to check documentation of pasteurization & product flow. Again, this person or organization will need to be approved by the ABC. All starts Sept 1. If you want to keep it simple, buy pasteurized almonds at an extra cost of .05 to .07 negotiated with your supplier. Call me if you have questions about the program and visit . Other advice: If you order LTL quantities, plan on more lead time so your supplier can have pasteurized product available.

California Almond Handlers need to get on the VASP for aflatoxin sampling. Yes, it’s a bit of a mess and we don’t know yet how uniformly the new EU procedures will be applied, but we may as well get it started and figure it out—that’s what we Californians are good at! Be sure to sign up and attend the annual FQS Symposium in Modesto on June 20.

Best regards, Ned

Ned T. Ryan

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