Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Ken Zaslow.
Kenneth Zaslow – Bank of Montreal
Good afternoon, everyone. Just a couple of questions. One is, can you give us kind of an outlook of how you’re saying about the commodities going forward and how the crops are coming out and what your perspective is on that?
Michael J. Mendes
Sure, Ken. Let’s just start with the walnut crop. Last year the California walnut crop was about 320,000 tonnes. Just as a reminder to those people on the call that most of the walnuts consumed in North America are US production. So that’s kind of the biggest driver to supply and demand. The two years before that were 360,000 and 355,000 tonnes, so the 320,000 crop last year was a shorter crop, prices accelerated. Going into this upcoming crop people are expecting this crop to be large, perhaps the largest crop in history. It’s a little early to say, but we would consider that in light of the early set of the walnut crop this year we would think that there’s probably a good chance that we’ll at least see prices stabilizing going into next year with what we see on this crop on walnuts.
As far as almonds, the almond estimate came out and the most recent estimate would project that the crop would be about 80 million pounds larger than last year and the carry out right now is projected to be about 20 million pounds larger than last year, which would give you an additional 100 million pounds of almond supply this year compared to last year. So almond prices are trading at a level that’s about half the price of walnuts right now in terms of a kernel price basis, so I don’t know if that’s going to mean much significant price reductions. I think some of that supply is already affecting the pricing, but that might have some influence in that direction if that crop bears out.
As far as the pecan situation, next year is the off-crop with pecans and the off-crop with pecans historically has been sort of about 185 million to 250 million pounds compared to north of 300 million that they had last year on the on crop. The inventory situation can somewhat influence total supply, but I would say that conventional wisdom is that pecan prices will be higher next year in light of the upcoming crop.
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