Ann: Select Harvests Limited Crop and Market Update, page-8

Also relating to the topic of the Californian drought mentioned previously by Surandy, this video from earlier this month highlights the direct impact of the grim situation on one Central Valley grower.

The video features Ross Franson, a Fresno-based almond grower, discussing the difficult decision to remove trees from his orchards, in response to the sparsity of water.

Franson's concluding comments in the clip highlights the severity of the current situation in California. Motioning to the wreckage of what was once acres of almond trees, his words have a ring of despondency about them:

'...The tragic part about all this is these are fifteen year-old trees that had another ten years of productive life in them, and here they are...'  

One point worth bearing in mind in relation to this is that Fresno, in the heart of California, isn't even one of the most severely impacted almond growing counties of California. The drought is far worse further to the north, as is indicated in the map below, taken from the latest update on the US Drought Monitor site.


That dark red blob that envelops the smaller almond growing counties in the north of the state - counties such as Glenn, Tehama and San Joaquin- is where the pinch of drought is being felt most acutely.

If growers in Fresno feel they have no choice but to remove almond trees in their prime, you would have to assume that almond orchards up in the north are most likely in a state of decimation by now.

The almond price has been depressed for about a year now, but it appears the almond market might have finally woken up to the unfolding Californian 'almondgeddon'.  

According to the latest update on the Merlo Farming website last Friday, the price of the Nonpareil variety of almond surged by 18.5%, compared to the previous update three days earlier.

That equates to $US 2.75 per pound.  If we convert to the local dollar and to kilos, it translates to $8.18 Australian, at time of writing.

Note that in the announcement last week ('Select Harvests Limited Crop and market update', 13/07/21) there was a comment indicating that '... the current market price was in the range of A$6.20 - 6.60...'

So if Merlo is accurate, that would imply that the Australian almond price has risen by more than 20% in the space of a week. The same announcement also noted that Select was still sitting on a stack of their recently harvested nuts (circa 60% sold so far), so any rise in the price of almonds would flow directly through to the company coffers once they have found a buyer for the remaining nuts.

It remains to be seen if Merlo is on the button on this, although personally I've found the Merlo site to be pretty reliable in the past.

But one thing is for sure: If Merlo is right, you'd have to assume that any short sellers who are still hanging around will be needing to hightail for the exit ... and pronto!