The 2017 Harvest is months away but we anticipate portioned Almond Crop income payments beginning in December and finishing by about August.  A payout was just received. It was termed the March Pool Payment. How is it derived, seeing as how harvest has yet to occur? Last year’s harvest is this year’s income!

Almonds (last year’s) are marketed year round by private companies known as Handlers. Growers, like ourselves, contract to deliver our crop production  from field to stockpile for processing, and ultimately to handler for packaging. Ours is Panoche Creek Packing. Their primary function is to market and sell nuts making transaction deals the world over.  As a matter of interest, 70% of sales are International with substantial deliveries to Asia and the Middle East.

With the Grower harvest pooled we rely on Panoche Creek to make spot sales throughout the year that take advantage of favorable market demand. This minimizes our risk to price swings and market pitfalls. There isn’t  a commodities exchange (e.g. Cotton, Feeder Cattle) only gathered summaries of prices paid as reported by the packing companies themselves. It’s obscure how the reporting system operates and a question that I shall keep asking. Follows is a global price trend to which we can compare our receipts and use for general forecasting.

As described the individual pool payments make up a portion of the whole. Our March payout was as follows:

• Nonpareil $0.50 /lb bringing  the running total to $1.55 YTD
• Others        $0.40 /lb bringing the running total to $1.35 YTD

These payouts are announced by newsletter followed by a live check. The price as of late is rather soft because of a strong dollar, which made already-high prices even higher for foreign buyers, so in other words, oversupply. We also read the Almond Position Reports that are issued periodically to observe actual sales in pounds delivered. When the final pool payment arrives this year our total payout will coincide with an average dollar per pound reflected in the charted trading positions during the course of the year. We rely on the shrewd marketing savvy of our packing company to provide a sensible return.

The Wine Grape business differs in that the current year harvest is paid within 45 days and in lump sum. The income is based upon a set price per ton negotiated at the onset by 15 year contract with the E. & J. Gallo Company. This affords us a stability in price and insurers a stable market in the long term with complete transparency.