All eyes are on the almond bloom this week in California. "Everybody is watching to see how the new crop is. This week is very critical," says Bikram Hundal of Custom Almonds LLC. Following the recent number of rains in the state, he also says that while growers don't necessarily want rain during the bloom period, the water is very much needed. "This year's bloom has been better compared to last year and I do think we'll have a better crop and higher crop compared to last year," he says. "However it's still very early and a lot of things can happen."

Meanwhile, the existing supply, which had a significant carry-over going into the season, is reducing. "We have had record shipments every month so the supply has gone down. We've moved that carry over which has been very helpful in the market. Export markets are up about 12.2 percent and leftover inventory is about 1.76B lbs.--around 11.44 percent less than last year. This is a healthy inventory level and will make a smooth transition once new crop kicks in," says Hundal.

Also factoring into the upcoming crop is the state of the almond industry. Hundal says many older orchards have been removed. "The pricing had been so depressed that the farmers were not putting in any inputs and they didn't do much this year either. Many have been selective in taking care of their orchards and doing their bare minimum to keep them running so that will impact production as well," he says.

Higher interest rates
At the same time, there aren't many newer plantings coming in to replace those trees. "With higher interest rates, I don't think many banks or lenders are financing orchards as well and they're not giving them the capitalized costs on developing orchards either. Banks are very selective in financing the orchards," he adds. Adding fuel to the fire, this week Chapter 11 bankruptcy was filed by prominent almond farming entity, Trinitas Farming LLC.

Meanwhile, pricing, which had been low, is shifting. "The price is so low and still very depressed," says Hundal, noting almonds are largely being exported. "Recently there's been a slight softening of markets. Before this, the price was going up as inventory was shrinking with increased shipment numbers and buyers were securing product."

However, once there is a better idea of how the new crop will shape up following the bloom, that will indicate what's ahead. "If the bloom is not that great and it looks like we'll have a short crop, there will be an uptick in pricing."

Source - https://www.freshplaza.com