SOURCE: Rabobank, N.A.

Rabobank, N.A.

April 15, 2015 15:00 ET

Almond Yields Expected to Be Adversely Affected by Drought

Prices Are Expected to Remain Robust, Says a New Report by Rabobank

FRESNO, CA--(Marketwired - April 15, 2015) - Continued drought and poor pollination decreased California's almond crop nearly 12 percent in 2014, helping drive prices to record highs. According to a new report by Rabobank's Food & Agribusiness Research and Advisory group (FAR), the decline in year-over-year yields was despite the addition of nearly 20,000 bearing acres.

Vernon Crowder, a senior vice president and senior analyst with FAR, said that one of the primary drivers of continued demand and higher prices is the use of almonds. "According to the Almond Board of California, nearly 50 percent of the almonds consumed in the U.S. are used as ingredients," said Crowder. "The higher usage as an ingredient increases the inelasticity of demand for almonds." Released today, Rabobank's report, "California Almonds: Maybe Money Does Grow On Trees," notes that in other parts of the world almonds are used as ingredients even more, in some cases exceeding 75 percent of overall consumption.

The report goes on to examine where growers and marketers will look for price trends. It notes that in-shell consumption has shifted since the early 2000s. In 2013, 86 percent of in-shell exports amounting to 400 million kernel pounds went to the Middle East, South Asia and East Asia markets, which overtook Europe as the largest purchaser of almonds.

Rabobank's report concludes that the price for almonds will continue to increase in the short term, not only because of supply and demand but also due to increased awareness of the health benefits of the product. This trend is expected to drive further plantings, though the growth of total production will be slower than in recent years due to the higher cost of suitable land and the scarcity of water.

The full report is available exclusively to clients of Rabobank and to media upon request.

About Rabobank, N.A.
Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With nearly 120 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees. 

Rabobank, N.A. is a division of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. www.rabobankamerica.com

About Rabo AgriFinance
As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that give producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, middle market agribusiness, input finance and sophisticated risk management products. Rabo AgriFinance is a division of Rabobank, the premier bank to the global agriculture industry and one of the world's largest and safest banks.

About Rabobank Food & Agribusiness Research and Advisory (FAR)
The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients' business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers. 

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