As 2016 draws to an end it is a good time to reflect on the year for the Australian almond industry.
Our 2016 crop at 80,000 tonnes fell 2,000 tonnes short of the record 2015 crop. The first estimate on the 2017 crop has it slightly more than 85,000 tonnes but we still need to get it through to harvest. The recent hail and high wind storm caused severe damage on a few orchards and impacted on a number of others. It is always difficult to comment from an industry perspective that the impact overall was light when you know that there are those in the industry who have suffered badly.
We are now exporting three tonnes for every tonne sold domestically so the global supply and demand situation is critical to us. There is no bigger influence on the market outlook than the Californian production and shipments. The Californian crop in 2016 rose a little less than 10% and added to a sizeable carry-in tonnage. The stock on hand figure for the US would have been substantially higher had the lower prices in the 2016 calendar year not boosted demand around the world and in their domestic market.
Shipments of Californian almonds have continued at record pace since the start of their new marketing year in August and are far outstripping the percentage increase in their crop.
The analysis of our 2015/16 domestic sales shows the global price rise that peaked in September 2015 did not impact on demand to the same extent as on export due to supply contracts creating a lag in retailers having to increase the price of almonds on shelf. Household penetration data showed a fall in the number of households buying almonds but countering this the heavy users continued to buy more and more almonds. Downsizing of pack size by one of the major supermarkets also worked against sales volume as those retailers that held the 750 gram pack increased volume and sales value significantly. Overall the Australian domestic market increased the volume consumed by 6.5% (excluding imports) in 2015/16, and Australian consumption rose 4% to 971g per person.
More detail on the market development and promotional activities undertaken during the year can be found in the recently distributed Annual Report and on pages 11 and 12 of this edition of In A Nutshell.
A number of issues in major export markets has made 2016 a challenging year. Marketers have had to address defaulted contracts, credit squeezes in some countries, and additional product testing at EU ports.
The ABA assisted in having the EU testing of shipments return from 20% to the previous level of 5% and also in maintaining the EU MRL for fosetyl-al at 75ppm. The proposed reduction to 2ppm would have precluded exports to Europe as even almonds from organic orchards would not have complied. In managing these issues, the ABA had great assistance from the industry marketers, the Commonwealth Department of Agriculture and the Almond Board of California.
On other fronts, the ABA has had a busy year participating on management groups dealing with the incursions of Khapra Beetle and Varroa Mite, both of which appear to be well on the road to eradication, if not already achieved. American plum line pattern virus (APLV), not previously known to exist in Australia, was recently identified in apricot and plum trees and it appears containment rather than eradication is the only viable option.
Biosecurity is a major issue for the industry and becoming more and more so. The industry obligations under the Plant Pest Emergency Response Deed require the industry to share with government the cost of remediation activities, which for the Varroa Mite eradication plan totalled $2.6 million. The almond share of this is over $300,000 as we are heavily dependent on pollination services that will be impacted should Varroa Mite become established in European honeybee hives. In the US, where beekeepers need to control Varroa Mite, the cost of pollination services to the almond industry is more than double that paid in Australia. The cost of the four year eradication plan is less than a dollar per tonne, per annum for the period of the plan. This investment in the eradication of the mite seems sound when compared with an increase of $600 a hectare in the annual pollination cost if hive prices were to reach the level now being paid in the US.
During the year, the ABA’s plan to establish a home for the industry’s research trials took two further steps towards being realised. PIRSA entered an agreement to purchase 60 hectares near Loxton on which to locate the experimental and demonstration orchard and SA state government funding for the Almond Centre of Excellence was matched by the Commonwealth in a ten million dollar Rural R&D for Profit project to investigate Advanced Production Systems for Temperate Nuts.
The biosecurity risk management strategy of the ABA maintaining high health status motherplantings to supply industry nurseries with budwood has been praised by Plant Health Australia. In 2015/16, two million buds were supplied by the ABA to nurseries to produce trees with reduced risk of virus contamination that can stunt orchard development.
The industry expansion that is occurring brings us back to the need to develop markets for our almonds and the recent Free Trade Agreements in Korea, Japan and China have assisted. The lack of progress on an FTA with India is frustrating however, muted FTAs with the UK and Europe would be very beneficial.
There is no doubt that the health benefits of almonds and nuts in general is helping drive the demand for almonds in Australia and around the world. The ABA’s strong promotion of the health benefits by engaging with health professionals, featuring in advertising, highlighting in PR and in social media is supported by the industry’s investment in research. More often than not when perusing the weekend papers and also frequently on television, the benefits of eating almonds are being extolled. The recognition by consumers of almonds’ health benefits is also driving its use as an ingredient in many new products finding their way on to supermarket shelves each year.
The proven health benefits in areas such as cardio health, brain function, muscle development, weight management and diabetes risk reduction were covered in presentations at the 2016 AAC held in November.
The AAC, conducted in Melbourne for the first time and attended by a record 409 delegates, was a great success and reinforced the collaborative and inclusive nature of the Australian almond industry.