(09-24-2021, 09:54 PM)Jags Wrote:

(09-24-2021, 09:09 PM)Senor Fantastico Wrote: Most processors are a big boy and produce their own commodities, but also buy independent stuff outside their own. They charge us a fee to process our stuff so they make money in that fashion as well. For example, the price of almonds was between $1.60 and $2/lbs last year for the grower. But I have to pay the buyer something like 40 cents/lbs to hull the shell and process the nut. Then, anyone that's bought almonds in the last 10 years knows you pay like $6-$8 in the grocery store for them. Pretty easy to figure out why they fight to sign us up right? 

The second half of your questions is more complicated. I'll try to explain it succinctly. 

Our nut crops are unique in that there's no real competition for them. It's just how much can we sell vs what we produce. Last year we produced a record 3.2 billion lbs of almonds and the price almost dropped in half. This year it's forecasted around 2.8b and the price is easing back up. And last year was probably our peak. Production will level off and begin falling due to water shortages. 

Raisins we don't just compete against ourselves. Grapes can grow anywhere between the 30th and 50th parallels. Turkey actually outproduces us by a bit, and now China is right there too. The difference is they produce a lot of C grade raisins, and our B&B is usually pretty healthy. So there's a little bit of a premium for Ca raisins. And if one region happens to have some sort of natural disaster, the price can really swing. 

In a fresh market crop like cherries, it's a little different still. It's time to the market for us. Washington is the best, but we're the fastest. So how much of your cherries can you get off ripe before Washington fires up harvest? If your a month ahead of them you're rich, if you're a week ahead, call in the gunnysackers and start a roadside stand. 

And yes, they all forecast sales, and the previous seasons carryover plays a large part in it as well. Turkey produced 250k tons and we have 100k tons of unsold raisins? Price is dropping in half. Turkey had a hard freeze and is producing 100k tons and we have 50k of carryover, record price! Stuff like that. 

And yes also, the processors will absolutely leave you high and dry if they feel they don't need your crop and you don't have a long-term contract in place. Or actually more realistically, they'll just offer you a price 30% lower than it should be. That's why when I was saying is grew on "cash contracts" for 5 years it's super scary. I negotiate a new cash price each year right before harvest. Luckily I've only had 1 bad experience with that a long time ago when I tried to do organic wine.

So many questions.  
As far as the nuts go, do they only buy the unshelled  nuts? Can one hull  them and avoid the .40/lb fee? And if so, I’m sure the machines that do that cost a pretty penny.  Is it worthwhile to have the machinery to process the nuts and sell higher? I’m guessing not otherwise that would be the thing to do. I’ve seen too much on tv about similar industries.  Seems to be the norm to grow and sell then let the other guy do to it what they want. But one has to wonder, if they want “x” to “y” so they can “z”, then “y” would be more profitable.

Almonds are the least restrictive crop in that way. You can buy your own huller for 50k and do it yourself. Or send to one huller and another processor. Kinda whatever. I think I'm probably contracted into the one guy for 3 more years in exchange for the trees. Not really sure though. 

I'm in favor of buying a huller but I'd have to convince a few guys to do it with me to make it cost effective, and they always turn me down. The rest of the processing stuff is so incredibly sophisticated and cost-prohibitive, it's a big swing for the fences. People try, and fail every handful of years as well. And these are guys that run other plants for years and years before they try doing their own. 

The good thing is just enough succeed to prevent those guys from being able to cartel up like some of the other commodities have.

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