Worst almond harvest conditions in 10 years

Almond growers are bracing for a rough year as input costs soar, the Australian dollar strengthens and wet weather rocks harvest.

Australia’s almond industry is on track to produce a record crop of 145,000 tonnes, but growers are bracing for one of their toughest seasons yet.

The Almond Board of Australia has warned growers the year ahead is shaping up as “one of the most challenging” for the expanding industry, as sea freight congestion shows no sign of easing, the cost of farming inputs soars and a record California almond harvest depresses prices.

An appreciating Australian dollar would also curb returns for growers, whose prices are pegged to the US industry, which dominates the global market by accounting for 80 per cent of supply.

ABA chief executive Tim Jackson said cheap water costs aside, growers were likely to face some of the steepest increases in the cost of production the industry had ever experienced.

“Perceptions from outside the industry that these costs can be passed on to consumers overlooks the commodity market reality that California’s supply imbalance continues to drive some of the lowest prices in 10 years,” Mr Jackson said.

He said US growers had produced consecutive record crops, which had flattened global prices.

“Global demand has been growing 8 to 9 per cent annually, but the Californian crop jumped 17 per cent in just one year. So the market dynamics are out,” Mr Jackson said.

Meanwhile he said a strong Australian dollar – which some economists had forecast to reach 80 cents against the US dollar – could wipe more than 50 cents a kilogram off returns.

Select Harvests managing director Paul Thompson says weather conditions haven’t been this bad during harvest for a decade.

WORST HARVEST CONDITIONS IN 10 YEARS

For Australian producers, harvest is in full flight and predictions of another record-breaking crop – following last year’s record of almost 124,000 tonnes – appear on track.

But harvest conditions are the most difficult the industry has seen in 10 years, and the unusually wet weather will reduce this season’s amount of clean, unblemished, in-shell product, which is favoured by Chinese buyers.

The Riverina has witnessed a deluge of rain over the past six months. Rainfall for the period to April 30 was 690mm, with 219mm falling in March and April alone.

Australian Stock Exchange-listed almond producer Select Harvests said today the wetter-than-average weather would affect 13 per cent of its total forecast crop of just under 30,000 tonnes.

Select Harvests managing director Paul Thompson said the adverse conditions would affect the quality and total crop volume of the 4000 tonnes of fruit still to be picked.

“Management is working diligently, implementing various strategies to fast-track the drying and processing of the affected crop to prevent further deterioration,” Mr Thompson said.

Despite the rain and other challenges the industry is facing, Australian growers have been making the most of their proximity to major trading partners India and China.

Mr Jackson said the marketing year – which begins in March – was off to a strong start. Australian exports were up 118 per cent in March, with 60 per cent of all sales going to India and China.

“The free trade agreement with China and our ability to get ships with a direct route to China has made it one of our strongest markets,” he said.