THE Australian almond harvest has started with pre-season estimates predicting a return to a crop size more in line with the industry’s orchard footprint.
After the disaster that was the 2023 crop, down 34 per cent on expected yields and in the midst of a depressed global market, growers are hoping to return to at least average yields in the hot, dry conditions which have prevailed in the lead-up to harvest.
Few growers made money on last season’s crop, when issues around a wet season and input costs were calculated.
Everyone was thankful water prices on the short-term market remained low after the floods of the previous summer filled storages.
As we enter 2024, prices have recovered a little and the Australian exchange rate with the US dollar has provided some hope of recovery among growers.
Demand for Australian almonds remains strong and despite a crop intake of just over 103,000 tonnes (kernel weight equivalent) the latest industry Position Report, published by the Almond Board of Australia, confirms processors have sold more than was produced.
With one month left in the 2023-24 selling season, sales are in excess of 125,000 tonnes. After two to three tough years with quality, all processors have taken the opportunity to clear out old inventory and reset with empty warehouses for 2024.
It is likely the industry will have the smallest carry-out in years.
It is the first time sales volumes have exceeded intake.
But it is not all good news.
After slow but steady improvement in pricing, global numbers have softened in the past week on the back of a lull in demand from key markets and speculation that California growers have had a positive pollination set.
There will be wide and varying opinions on what the 2024 Californian crop will be, but the notion growers have the resources to apply comprehensive nutrition programs to maximise yield is considered optimistic.
The struggles to remain viable are real in California and the footprint of almonds has reduced, based on recent spatial mapping reports.
The contrast in Australia remains ambiguous. Investors are still bullish on planting more almonds and while the fundamentals around producing almonds for existing growers with processing contracts locked away appear sound for the long term, the outlook for potential newcomers comes with increased risk.
The uncertainty around water availability due to government intervention on the water market in the Murray Darling Basin and the pressure on beehive availability in August are two key factors that have the potential to increase the cost of production.
There are also issues around a shortage of processing capacity for new crops.
The industry is already stretched and with existing trees in the ground, this pressure will continue to build as young trees come into production over the next three years and push production to at least 200,000 tonnes.
Almonds have become the crop of choice among many investors in the southern Murray Darling Basin over the past 10 years, but one would suggest there are enough unresolved issues facing the industry to warrant a cautious approach to expansion for the time being.
