In California, Drought breaking rain may have a negative effect nearest to home.
Key points
- Rainfall of about 140 millimeters has been recorded in some parts of California within 24 hours this week.
- Drought-breaking rain may result in the destruction of the almond crop of this year which is already estimated to fall by 10 percent on last year.
- The almond growers in Riverina are hoping for prices to return to the 10-year average.
California’s Drought-breaking
Market Bounced Back by Nearly 25 Percent
The almond growers in Riverina have been waiting to witness prices back to average next year as a result of a supposed deficiency in the almond production of the U.S. The market had bounced back by nearly 25 percent in the past months, from the series of the lowest prices witnessed over the last ten years.
Although, the chief executive officer of the Almond Board of Australia, Tim Jackson stated even before the heavens operational in the US the market had begun to weaken as a result of ongoing freight difficulties.
Mr. Jackson stated, “There’s a lot of uncertainty around when stock can leave the port and when it’s going to arrive at its destination.”
“As we enter a period of volatility in pricing, exporters are in a tricky situation where they’re selling [almonds] at one price and then if it takes undue time to arrive at the other end, there can be uncertainty around the acceptability of the value when it gets [there].”
Heavy Rain Could Further Reduce This Year’s Us Crop
According to the reports, some parts of California received the nearest to 140 millimeters of rainfall last week in 24 hours. Mr. Jackson stated whilst this was great news for US growers long-term, the almond crop of this season might be reduced further as a result of damage due to excess water.
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“The impact on the market in the short term is a little bit unclear at this stage.” Despite the recent news out of the US and inflated shipping costs, the sector was still hoping that prices in 2022 would bounce back to the 10-year average of about $7.40 per kilogram positively.
Mr. Jackson stated in the context that this was because last season California had managed to produce a record crop of nearly 3.1 billion pounds. Significantly, this year the crop is expected to be nearly 2.8 billion pounds.
“Before we assess any ongoing damage due to the rain, you would think there is an imbalance in the supply and demand that’s been created by that monster crop the year before.”
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“That should level out prices going forward. But they’ll be the peaks and troughs, and buyers and sellers try to get the upper hand in the short term.”
Riverina Almond Growers Feeling the Pinch
Paul Rossetto, who is the Griffith farmer involved in selling almonds to grower cooperative Almond Co, stated that they had gained a rise of 6 percent in their 2021 pool prices this year, reaching the price of $5.50/kilogram. However, still it is far away from the $7.40 10-year average price.
As stated by Mr. Rossetto “The prices coupled with a drop in yield last season, has led to a cash-flow pinch,” adding further “The water prices are low but right now. We don’t need a lot of water; we usually start to run out of water in the New Year if it’s too dry.”
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Although, gains seem to be probably improving this year, which will help in neutralizing the variable market.
“The trees are looking very healthy. They’ve appreciated the rain. There’s not a lot of diseases that I can see compared to last year.”
