One report over the weekend indicated that beekeepers in NSW...

One report over the weekend indicated that beekeepers in NSW beyond the bounds of the varroa biosecurity zones will have movement restrictions loosened starting from next week.

...Beekeepers in New South Wales will soon be able to move their hives for pollination services and honey production under a new plan announced by Agriculture Minister Dugald Saunders.

From next week, commercial beekeepers can apply for movement permits as long as they are outside of a varroa mite biosecurity zone...

Not a moment too soon, given that we are only weeks away from the commencement of the almond-bloom in Australia.

Admittedly, we are not quite out of the woods yet: if the varroa mite rears its bugly head elsewhere in the state, all bets are off.

However, Tim Jackson, the chief executive of the Almond Board of Australia, seems to be confident that the pollination is on track to go ahead:

...It's also been backed by the Almond Board of Australia, with its chief executive Tim Jackson saying almond growers are back on track to produce a crop worth more than $ 200 million next summer...

I think the impact of the movement restrictions within NSW represented the most adverse threat to the formation of the 2022/23 almond crop. One secondary issue that was noted in the recent announcement, is the border restrictions, with South Australia and Victoria potentially facing a bloom-time bee-shortfall.

I'm not particularly worried about this, however, as during the pollination period, the bees seem to do their work remarkably efficient, even in the face of adversity.

Over several years, I have been in the habit of monitoring the bloom-time conditions in the major Californian almond growing countries, and I have always been surprised at how well the bees seem to perform during the most testing of times.

One good example I recall was in the pollination during 2019, when the bloom-time conditions were murderous for the bees in the two largest almond growing countries of Fresno and Kern.

The average temperature in Fresno between the 14th and the 23rd of February in Fresno that year was just 11.9 degrees, and only marginally higher in Kern.

Temperatures below 12.77ºC represent hazardous conditions for bees, but despite the bitter bloom-time cold, the crop once again surprised on the upside, weighing in at 2.535 billion pounds, slightly above the initial estimate.

There is no doubt conditions 2019 were woeful for the bees. The reason that the pollination was so efficient in the face of such challenging weather was simply down the the 'do-or-die' mindset of the insects. And die they do, by the truck load, when conditions are awful as they were in early 2019.

CCD (colony collapse disorder) is a major concern in the United States, and several years ago the issue prompted the formation of a group, called 'Bee Informed', who track annual bee losses across the county. The chart below is taken from their website.

As is evident from the chart above, the winter bee loses in 2019 were the worst experienced by US beekeepers in the past decade. I don't have much doubt that this was mostly down to the dire conditions endured by the bees during the Californian pollination period.

A few years ago, I drilled down on the data on US bee-losses, and I noticed that this didn't seem to be a one off. The annual bee losses in the US seem to be strongly influenced by the extremity of the bloom-time weather conditions in California.

Another factor that strengthens my suspicions around a probable link between the Californian bloom-time and CCD is related to the timing of emergence of the problem. It was first reported in the US in the winter of 2006-2007.

There was a particular trend underway in almond orchards in California at about this time, illustrated on the chart below:



That surge in almond production around the year 2006 had much to do with the trend towards high-density almond orchards, with the trees planted much closer together than had been the traditional practice.

This meant that more bees were required for the pollination, but also , more of the beehives were in closer proximity to each other, which meant that bee-diseases could be more effectively transmitted between hives.

What I am suggesting here is that with respect to CCD, the Varroa mite might be something of a scape-goat.

The primary cause of CCD, in my opinion, is simply down to the fact that most of the bees in the USA end up being sent into California during February and March, months characterised by extreme weather, which is naturally not particularly conducive to bee-health.

On top of that, bees are entering the the state from all corners of the USA, so effectively the Central Valley becomes akin to a petri-dish, with bee-disease quickly spreading from one hive to another. Probably the most obvious of there, of course, is the spread of the varroa mite.

Although the Californian almond bloom isn't cited as a cause for CCD on the EPA website, I'm sure many US beekeepers are well aware that there is a link between the pollination period and CCD. However, they are keeping mum on the subject, as many of them rely on the Californian almond bloom to keep their operations afloat.

Anyway, getting back to local situation, if there is one positive about the varroa crisis in NSW is that it does highlight the competitive advantage enjoyed by Australian almond growers, assuming that the varroa problem is kept in check.

I would cautiously suggest that the recent plunge in the share price below the $5 mark that was triggered by the varroa outbreak in NSW might represent the bottom of the share-price barrel.

The underwhelming forecast of the objective report, discussed in the other thread, should result in a stronger US-dollar almond price, though so far I haven't managed to find any almond price updates since that report was released last weekend.

However, assuming we do see a stronger almond price in the weeks ahead, and assuming that the spread of varroa is contained in NSW soon, I think that could set the stage for a significant share price rally.