October 2003 NEWSLETTER

8800 South Minturn Road
Le Grand California 95333 USA
Office 559-665-8500
FAX 559-665-8588

Almond Industry Position Report

Carry-in August 1, 2003
2003 Net Marketable Crop (Received to date)

September 2003 (Million Lbs.)

162.0
383.3

190.8
297.5

Total Sold

Uncommitted Inventory (Not Sold)

488.3

56.7

Position Report

California almond shipments for September slipped to 98.8 million pounds compared to last September when we shipped a record 112.2 million pounds. This dip is nothing to be concerned about when you consider the late harvest coupled with the marginal quality resulting in slower thru-put in our plants, reducing availability. The best news is total shipments for the year stands at 165.4 million pounds, down only .8 millions pounds compared to last years all time shipping record. With California varieties now being available for shipment, October should equal last years shipping record of 127.6 millions pounds. Crop receipts for this 2003 crop were reported at 399.2 million pounds. Looking at 488.3 million pounds sold suggest that our industry could already be 50% sold or slightly greater. With ten months for the industry to market the remaining 50%, the market should remain firm at least up to bloom time.

2003 Crop Harvest

We started receiving deliveries at a swift pace after Labor Day weekend putting harvest 5 to 7 days later than last year. Quality continues to be “hit and miss”. The average inedibles grade for Minturn Nut is 2.3% - twice last year's. Foreign material, chipped & scratch and broken are on par with last year. The “pin hole” is the inedible “culprit” causing us fits in processing and slowing down our production output. Crop production on nonpareils are off about 20% compared to last year. Pollinators are down 8-10% when compared to last year, with Butte/Padre turning in the best consistent production figures. Weather has cooperated beautifully for the second year in a row and as a result most growers have completed harvest. Although there are plenty of stockpiles around the country the total crop size is still difficult to determine because of the remaining crop left to be delivered. Based on receipts to date the most frequently quoted crop size projection is 925-950 million meat pounds.

The Market

The world almond market continues to amaze us, as the upward pricing trend keeps moving forward. Listed below are the key factors pushing the market:

1) Weak dollar
2) Small Spanish almond crop
3) Pathetic Turkey filbert crop
4) Record demand
5) 20-25% less world supply
6) Strong 2003 crop commitments
7) Consumer awareness of health benefits from eating nuts
8) Nut category prices up across the board

One month ago today when prices were $.20-.25 lower across the board buyers wanted to contract long term (Jan. forward). Processors and growers were reluctant to do so fearing prices were going to move up, which they have. Today buyers are reluctant to contract long term fearing a pull back in prices. Prices have reached levels we haven’t seen since the 1998 crop, creating a nervous market. Most handlers feel a “pullback” is unlikely because of the strong foundation that today’s market has been built on. Optimistic industry sources believe $.15-.25 per lb could be left in the market before we hit the peak. How the market responses from this point forward is difficult to project. Our feeling is prices should remain strong up to bloom time. From bloom time forward prices will hinge on the prospects of the 2004 crop.

Today’s Market Prices

Based on today’s market levels, grower prices would be the following: Nonpareil $1.80 with California types at $1.65-$1.70.

Buyer & Seller of Quality California Almonds