PRESIDENT’S CORNER
8
Almond Facts
NOVEMBER | DECEMBER 2016
President’s Corner
Mark Jansen
President and CEO
Knowledge. Dedication. Leadership.
Adapted from 2016 Annual Meeting Address
Every day, I am grateful to work at an organization where the owners’ most common question is,
“Mark, how is your family?” Family is what sustains us and helps us to grow. Our co-op is a family
bonded by partnership. You entrust us with your year’s work in the form of your almond crop. We
respond by maximizing your returns. The purpose of the co-op is to ensure the economic vitality
of our owners’ almond farms, including small and large orchards. Everyone associated with
Blue
Diamond
has a tremendous sense of purpose. Our co-op team members frequently hear from me,
“treat
Blue Diamond’s
business like it’s your own; our growers are counting on you.”
This past year was the most volatile on record. In
hindsight, it is clear that the drought had created an
almond industry pricing bubble. When any market bubble
bursts it is always a little (and for some, a lot) painful. Over
a seven-year span, almond prices tripled. It was a great
time for growers to strengthen their balance sheets.
In the summer of 2015, expectations for on-going drought
and smaller crops pushed prices to unsustainable levels. At
harvest, the industry recognized the potential for a slightly
more robust crop and prices softened. Customers in Dubai,
who had purchased at the summer peak, had almond
containers arriving in the fall worth $.50 less a pound.
Many of these buyers were new to the almond industry
and had only known almonds to be worth more upon
receipt. Fortunately,
Blue Diamond Growers
has decades-long relationships with our
customers, who tend to be better capitalized
after surviving previous market swings. For
building such a quality list of customers
and managing them through a difficult
marketing season, we owe our thanks to
Bill Morecraft, Warren Cohen and the
rest of the Global Ingredients sales and
customer service teams. This team, like so
many in
Blue Diamond
, provided unwavering
knowledge, dedication and leadership!
While we managed to have very few defaults,
other handlers were not so fortunate. As the
shaky buyers defaulted on their contracts, they sent orphaned
containers back on the market at discount prices, causing
India to also default on contracts, creating a downward spiral
in prices. Good customers were reluctant to buy. They kept
waiting to see if the price lowered again. During this time
when there were no buyers, other handlers’ call pool growers
were desperate to sell almonds, pushing prices down further.
Finally, in February, the market hit rock bottom. Slowly the
industry worked through the defaulted contract inventory and
began building confidence back in the market. Demand in
developing markets returned. Since this dramatic correction,
prices have been remarkably stable and are even rising.
Excluding the two peak years of the drought-induced bubble,
current almond prices are amongst the best on record.
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
2016 Almond Prices Amongst Best Ever!
0 0 0 03 04 05 06 07 0 0
16
Drought Bubble
