MODESTO, Calif.—Blue Diamond Chairman of the Board Clinton Shick predicted a continuing trend of firming prices for cooperative almond growers at their 99th annual meeting. Factors for a positive outlook include a manageable 2009 crop carryover, reduced kernel size variations between the dominant nonpareil and pollinators versus the 2008 crop, a continuing trend for record sales in India, China and the Middle East versus the traditional markets in Europe, and a recovery in the global economy.
Given recent months of consecutive record shipments and larger future crops exceeding 1 billion pounds, Shick said a two- to three-month supply of carryovers into the next crop year are needed to meet annual demand. He also said kernel size will not be a significant variable in 2009-10 and may have been overemphasized by global buyers facing dismal economic factors late in 2008.
"We must work harder as an industry to bring price levels of our pollinators up to a level that allows sustainable production of not only the nonpareil variety, but other varieties too," he said.
Shick expects traditional markets in Europe to be challenged by increasing demand in China, India and the Middle East where consumption increased 115 percent, 19 percent and 51 percent respectively.
He also encouraged grower owners of the Blue Diamond cooperative to continue to support the capital expenditures needed to sustain a growing business driven by consumer demand for high-quality, safe and healthy almond products.
Shick praised the Consumer Products Division for its stellar snack sales performance of a 600 percent increase in North America over the last seven years. Growth in retained earnings of $6 million of profits largely from branded sales of products like Almond Breeze and Nut Thins and other natural foods products helped to reduce the amount of revolving reserves from growers. Branded activities also will be leveraged in several global markets where higher margins can be earned to enhance Blue Diamond's competitive return to cooperative growers.
He also recognized that larger crops bring lower prices at a time of extraordinary challenges. Factors affecting farm profitability include higher costs for inputs, escalating capital requirements for bank loans, uneven distribution of weather conditions that affect yields to varying degrees from one orchard to another and a severe water crisis.
