Blue Diamond Chairman Is Bullish on Almond Crop Outlook

Given recent months of consecutive record shipments and larger future crops exceeding a billion pounds, Shick said a two to three month supply of carryovers into the next crop year are needed to meet annual demand.

26 Nov 2009 --- Blue Diamond Chairman of the Board, Clinton Shick of McFarland, 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 a 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 that 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," he emphasized, "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."

Shick also 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. "Even during early spring when major financial indexes were at their lowest levels in several years, almond shipments began to set records and continued through last summer which helped to give cooperative growers an excellent competitive return on the 2008 crop," said the McFarland grower.

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. "Almost all of our capital projects actually produce a positive cash flow to the pool in the first year and every year thereafter," explained Shick. "Our view toward capital expenditures is long term, and generally not affected by current market or crop conditions."

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 will also be leveraged in several global markets where higher margins can be earned to enhance Blue Diamond's competitive return to cooperative growers.

While recognizing Blue Diamond's success at achieving strategic goals and refining its business model, innovating new products for 99 years and continuing to build a business model of "added value" capabilities, Shick 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.

"Lawmakers and their influencers continue to debate our state's broken water infrastructure but have given little more than lip service to resolving the 'man-caused' drought," said Shick.

Shick, who has participated on the Blue Diamond board for 25 years, was re-elected to serve another year as chairman. Dale Van Groningan of Ripon was re-elected to serve as vice chairman. Board members Kevin Fondse of Ripon, Charles Crivelli III of Turlock and Dan Cummings of Chico were re-elected to serve another three-year term.