Arguably Australia’s largest almond grower and processor and third largest grower in the world, Select Harvests [ASX:SHV] saw its share pricing falling today. The company published an update pertaining to a low crop yield forecast.
Select said it would be upgrading its net average price forecast off the back of lacking crops in the US.
AHV dropped by more than 1% in the share market after publishing its update and was trading for $4.51 at the time of writing.
The stock is currently trading 29% below the ASX 200:
Source: TradingView
Select Harvests drops almond volume expectations but hope rises for prices
The nut producers revealed that lower volumes across the weighbridge — as well as lower crack-out rates — have reduced the 2023 crop volume forecast to 17,500 metric tonnes for the year. This is down on the 29.000 metric tonnes produced last year and 28,250 metric tonnes the year before.
Select said the harvest is now 97% complete, allowing them to gauge their expectations for the full yield. Weighbridge data was also received from over 90% of the total 2023 crop as it was delivered to the processing facility.
Now with 30% of the nonpareil and 5% of the pollinator varieties hulled and cracked, the group feels these expectations are adequately supported.
What seemed to cause the lower volume appeared to be linked to strange climate conditions, which occurred through unpredictable cold and wet weather periods. What resulted was unusual growing patterns and lower yields.
A result which, according to SHV, resonates with the broader Australian almond industry.
Despite the unexpected crop yield patterns, Select said there had been quite a drop in the US crop yield over the period.
On top of that, the group reported global almond pricing has recently increased in line with world demand.
This allowed the company to upgrade its 2023 net average pricing forecast for its own crop to the range of $7.40–$7.80 per kg, with even more increases expected.
The company expects the 2024 crop to deliver improved yields in a favourable pricing and cost environment.
Managing Director, David Surveyor, stated:
‘Assuming a return to more normal weather conditions we expect yields for the 2024 crop to bounce back to 2021/2022 levels (or better given the maturity profile of our trees). Assuming the status quo on almond and water prices, we expect a return to profitability.
We expect the financial impact of the volume downgrade is likely to be partly offset by recent increases in almond prices, from increasing world demand and an expected below average 2023 US crop, however, our focus now is firmly on our 2024 crop and returning to normal yields.’
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