Riverland farmer Simon Vause had only been dabbling in almonds when the drought hit South Australia a decade ago, but he took a leap of faith, pushed his naval orange trees over and replaced them with the popular nut.
His upheaval is paying off as almond growers in southeastern Australia experience near-perfect growing and trade conditions — they have full water allocations, the dollar is low, the dominant Californian industry is battling drought and prices are higher than ever.
“Having naval oranges at the start of the drought, we had low commodity prices, low water allocations and the high dollar, it was a nightmare,” Mr Vause said.
“But we’re right in the middle of a perfect storm now with lack of almond supply in the US, the low Australian dollar — it doesn’t get any better than that.”
Almond prices have more than doubled to $10 a kilogram since 2011, and Mr Vause is expecting the grower price to rise above $11 in the coming months.
This great news for our Australian almond grower, Select Harvests, which reported year end earnings last week.
Earnings were up 175% and cash flow was up 30%. The company harvested a record 14,500 metric tonnes of almonds versus 10,000MT last year. The management stated that the increased production and higher prices for almonds, along with constrained California supply contributed to the earnings gains. The company's full year results presentation is available here. I continue to like Select Harvests especially after the recent weakness in world stock markets.