Tuesday, January 28, 2014

California Drought

Californian Tree Nuts

It seems like "drought" is the only word that everyone seems to talk about in California, these days.

With current pricing on domestic nuts(pistachio, almonds, walnuts, etc), everyone has a stake in how much water California gets in the next month or two.  Unfortunately, it isn't looking too good.

According to US Drought Monitor(produced jointly by USDA, Dept of Agriculture and National Drought Mitigation Center, or NDMC), Western US is in for "Severe" drought for the next three months.  The reservoirs and wells are at lowest levels seen in decades and there doesn't seem to be good news in sight.

The almond growers and packers are becoming concerned for next year's crop.  The silver lining seems to be that they're finding that crop receipt number may hit 2 billion pounds.  However, with the recent news, the prices from growers have only increased.  Market is continuing the trends experienced last week. We now are looking at a nearly $0.20 cent increase in prices since the shipment report earlier this month. Many regions seem to have been uncovered on all early 2014 needs and well into the spring.  It is still too early to tell if this drought will have effect, if any, on 2014 crop.

The walnut market, which traditionally trended lower past Chinese New Year purchases, have remained stable.  With current conditions in CA and news that Chinese walnut crop is expected to be short anywhere from 20 - 30%, have kept the walnut pricing at a stable level.... which is still very high.

Please contact me if you have any questions or concerns regarding updates within the market.

Thank you.

-T. Kim

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