Category Archives: Marketing

Almond World Markets

Marketing

It’s on our minds; How are the tariffs affecting sales? Attention is directed toward China which is a player. According to market following pundits, it’s too early to tell.

Top ten export  markets — alongside the USA’s domestic deliveries for scale — These 10 represent 65% of total exports. Source: Almond Almanac 2017

Overall the outlook for Almonds are the picture of health but the latest snapshot, which would be from June, is mixed. Shipments were down 11% but for the year to date shipments are up 8% over last year. (This is good because the USDA estimates that the 2018 Almond Crop will be record breaking.) China and select markets are presented:

Source: June Position Report

“Everybody wants to know how the tariffs will affect the shipments. Unfortunately, it will be months before we know. Almonds will be more expensive to the consumer causing concern; prices they haven’t seen since the 2015 crop.” – Panoche Creek Packing Almond Market Brief for July 2018

Thanksgiving

Marketing

Regarde our almond tree performance this year! We had set expectations for this year’s crop knowing that quite a few of the trees went MIA during the springtime blowover. The harvest totals are nearly finalized and aside from the reduction in tree count, the trees that are still upstanding have done a superb job.

These results for our Monterey variety are fairly representative. All figures are expressed in net pounds. Observe that yield per tree held to its historical average…

Yield
[enlargeable]

Note that some years are better than other years and the farmer will try to fathom why and how that is and try to  help the trees produce consistent results. A necessary step in this task is to track the year over year results as you can see in these spreadsheet snippets.

Graphical Yield[enlargeable]

Nut sizes fluctuate as well. The nut sizing method counts the number that fit a one ounce (28.35 grams) container. Thus the smaller the size number rank then the larger the nut kernel 18 to 20 is the largest size category, 36 to 40 is the smallest. Observe the correlation between our production yield above and our nut size comparison chart that follows.

Nut Size[enlargeable]

It would seem that a prolific nut set results in smaller individual nut size and vice versa.

There is one more production metric and that one is the conversion from field harvest weight (gross) to processed meat weight (net). This is called Turnout and is derived at the Huller by dividing the net meat weight by the gross field weight.

Typically, field weight yields 13 percent debris, 50 percent hulls, 14 percent shells, and 23 percent clean almond meats and pieces, but these ratios are variable as you can see. So, at 25.3% our Turnout was adequate.

The Butte will be processed soon and that will wrap things up for 2017. We have much to give thanks for.

 

Post Harvest

Marketing

This years almond crop has been picked up and now critical post-harvest irrigation, and soil amendment (fertilizer application) begin almost as soon as the nuts leave the orchard. We are mindful to see to the needs of our trees which despite environmental challenges this year performed quite well for us.

Even though relative peace and quiet have returned to the orchard, there is a continuation behind the scenes. While not directly hands on we still follow the cycle of our crop and it is interesting to know the process.

Truckloads [38] arrive at our Huller/Sheller, the Central California Almond Growers Association (CCAGA), where they are temporarily stockpiled. Just as we were careful to monitor moisture, avoid mixing varieties, and control contamination, the huller must do the same. The product is exposed and rain and fog which will be the norm soon. In the event of early rain then plastic tarps can be used as cover but this is labor intensive and can be problematic. Their best bet is expedited processing.

This is a snippet from a CCAGA stock pile grower history print out. You can see that our Butte variety from the East Field were delivered by the truck load [4] and went into the stockpile identified as KNB74

The individual loads were identified by receipt and weight certificate numbers which are all part an important chain of accounting.

What does the CCAGA do: The Huller removes the outer hull (repurposed for livestock feed) and the inner shell as well and then delivers the clean and debris free raw nut to our contracted packing company, Panoche Creek. You may have heard of the marketing brand Blue Diamond; this is a [competitive] packing house cooperative – credit the stockpile photos you see here.

Not all almond consumers like them raw by the way. Demand for nuts sold with the inner shell intact has been on the rise. They go to foreign buyers and command a premium so we are happy to furnish them inshell.

The next post will describe the processing at Panoche Creek Packing and then finally, a detailed look at the paper trail progression from end to end and how to decipher it.

Minding the Till

Marketing

There’s an Almond (or Wine Grape) harvest documentation chain of custody from the Weighmaster to the Processer. However, there is a leap of faith gap between the harvest collection and a transport’s first stop at the scales. In previous times we relied solely on the moral integrity of the trucker until we came to the realization that this was a security hole in our method system. What if a load (or more) were never to arrive at the Weigh Station, diverting instead?  An unaccounted for trailer load would be a small skim of our grand total and would certainly line the pocket of the thief. Would we be the wiser?

It’s the modern day equivalent of horse thieving or cattle rustling. It’s a crime that’s difficult to guard against and discoverable only after the fact, if that. Commodity theft is not a fluke:

Ideally, one of us should be camping onsite to observe and document the coming and goings of all trucks with trailers. Perhaps, strategic placement of security cameras to record truck IDs or trailer license plate numbers would be smart. As it is today, we now rely on a ranch management employee assigned the recording task. Clipboard in hand he dutifully logs the  heavily loaded trailers that leave our private dirt road and hit the public highway. Or, does he… Could he be in cahoots for part of a cut? We rely upon our monitor’s diligence and have faith in his honesty. Small need for conspiracy paranoia — but a topic to be aware of and to consider.

Managing Expectations

Marketing

The big question is how the Almond trees will perform as measured by harvest [yields] now in full swing. As you’ve been following along this crop year you will know that we endured active springtime weather that impacted trees and pollination. An objective statewide consensus believes that production will be slightly less [1%] this season.

What can WE expect? There are several variables that are givens (constants)

  • Acreage – 152.48
  • Trees – 16,166 (2016) and as per the previous post 15,491 (2017)

and some [2016] historical perspective:

  • Yield – 2,019 lbs/acre
  • Yield – 19.05 lbs/tree

We could drill down even further. Did you realize that the West block is in competition with the East Block? Soil quality, land grading, or past horticultural practices are likely culprits. The West field consistently underperforms; East Field == Winner!

2017 Best Guess for Estee Strom, LLC:

  • 19.5 lbs/tree East Field x 7,914 trees = 154,323 lbs
  • 17.3 lbs/tree West Field x 7,577 trees = 131,082 lbs

for a combined total of 285,405 lbs. or 1,872 lbs/acre…

The National Agricultural Statistics Service has supplanted their [May] subjective report which had forecast improvement for this year’s almond crop. This month, their objective estimate is even rosier.  Of note however is the number of nuts per tree down -7.2% but larger in size which would appear to recollect the 2010 harvest.  1 million bearing acres (!)

  • Per Acre: 2,250 lbs. (-1%)
  • Bearing Acres (Trees planted 2014 or earlier): 1,000,000 (+60,000 acres)
  • VS. Subjective estimate of 2.2 Billion lbs: +2.3%
  • VS. 2016 Receipts to-date of 2.134 Billion: +5.4%
  • Nut set per Tree: 5,714: (-7.2%)
  • Trees per Acre: 117 (up from 116)
  • Kernel Weight: 1.57 grams (+3.5%)
  • NASS found kernels to be wider, thicker, and longer than last year. The largest kernels since 2010.

We shall see if this outlook holds true for our orchard. Our ranch management is extremely reluctant to make yield predictions and comparisons so we rely on these global surveys for intel.  This report details the sample testing procedures and predicts an 80% confidence level. The activity was funded by the Almond Board of California. Our mileage may vary.

Almond Crop Estimate

Marketing

…and Contest! Woah boy. The Panoche Creek Packing publishes a newsletter titled: In A Nutshell; subtitled: Predictions and Trends for the California Almond Market. Panoche Creek markets our almond crop so it’s their dutyto keep tabs on industry trends regards to sales pricing and volume. The two are linked of course but the volume aspect is of particular interest to them because — job security!

So every year they host a just for fun event where their Grower Customers (like we) are invited to submit a value number that predicts the future. The results are published and a winner announced.

2017 Crop Estimate Contest
For our 2017 crop Estimate contest the prize will be $ 1,000. This year’s rules follow: The closest guess to the receipts of the 2017 crop, as shown on the March 2018 position report published by the Almond Board of California, will be the winner. The winner wilt be rewarded with a $1,000 cash prize. One entry per farm organization… etc. etc. 

I am not one to participate in lotteries, raffles, and drawings and less so in a public (real names) pronouncement of a guess. The aforementioned results are tabulated and if your submission happens to land too far outside the crowd median one might appear, ahem — uninformed. Embarrassing.

I did establish some Cred when I actually WON! the prize a few years back. Now I’m wondering how I can repeat that performance and live up to the fame. If this year’s guesstimate is way off the mark this time then I will have been a won-hit-wonder and everyone will know.

How does one derive a good number? Well “Ed”, the last year’s winner, bet 2,126,896,000 pounds (against 2,131,006,583 actual).  That’s a lot of nuts. The figure that I picked in 2014 was 1,901,449,000. Since then statewide there have been existing orchards removed and new orchards established. There are sources that monitor bearing acreage. Next to know is the average yield per acre. Yield in pounds per acre X number of acres = that big number in billions.  The trick is to predict the variances be they inaccuracies in the acreage estimates or fluctuations in the yield due to weather, acts of god and mother nature.

Historical Yield per Acre in pounds

Historical Bearing Acreage

[ source ] California Almond Board

It can be a challenge to interpret objective measurement reports. There is science to this and I’m sure there are people who are paid full time salaries to inform market players. Maybe just add 10% to the last guess and call it done.

But wait. There’s more to it. There is a keyword in the contest fine print that says: receipts. We have to analyze too the marketing aspect. Almond Packing Marketers (such as Panoche Creek) don’t always sell an entire crop in the year period of harvest. The excess is called a Carryin and this can amount to millions of pounds. The receipts amount to the number of pounds marketed. Best have a look at last month’s Position Report and will try and decipher.  Evidently there is a 3% Loss of the inventory every year due to critters, decay, age; this explains the difference between production and the remainder carryin/carryout. The tabulation below shows the receipt variable.

Year Yield Acreage Production Receipts
2007 1,840 610,000 1,122,400,000
2008 2,170 640,000 1,388,800,000
2009 2,300 710,000 1,633,000,000 1,606,372,490
2010 1,880 750,000 1,410,000,000 1,395,051,752
2011 2,130 770,000 1,640,100,000 1,618,404,740
2012 2,540 800,000 2,032,000,000 2,012,824,704
2013 2,300 820,000 1,886,000,000 1,878,596,013
2014 2,360 850,000 2,006,000,000 2,003,500,548
2015 2,150 880,000 1,892,000,000 1,888,243,454
2016 2,130 890,000 1,895,700,000 2,131,006,583
2017 ? ?? ??? ????
In a nutshell (sorry) we have the production to estimate and then figure how much of that as well might be counted as losses and then how well will the market absorb any carryin.
  • Our pick for 2017 should be: ????
  • Our number in 2016 was 1,989,499,000
  • Our number in 2015 was 1,789,000,000
  • Our number in 2014 was 1,901,449,000

The USDA California Field Office publishes a year end Wine Grape statistic called the California Grape Crush Report. The final summary for the year 2016 shows a statewide increase of 9.3% with the largest share of all grapes crushed being the red wine variety. It is interesting to note that the highest average price paid went to District 4 (Napa County) a t $4,685 per ton!

Our region (District 13) has the largest volume share of this crush statistic but the average price per ton was $301.85

Observe that Muscat of Alexandria is a leading grape variety.