Commodity Presentations. Presented by: Jim Zion Managing Partner

Transcription

1 Commodity Presentations Presented by: Jim Zion Managing Partner

2 Established in 1995 by Jim Zion and Martin Gesell Growers throughout California, Arizona and New Mexico Over 500 direct customers worldwide with an active presence in 40 countries Sales of over 50 million pounds of product valued at $175 million. A strategic link between growers and the marketplace.

3 Millions Commodity Production vs. Farm Value 2,500 $4.00 2,000 1,500 1, $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 Farm Price/lb / / / / /2016 $0.00 Pistachios Walnuts Pecans Pistachio Value Walnut Value Pecan Value

4 Pistachio Industry

5 Commodity Overview US is the production leader followed by Iran and Turkey Major production areas are California, Arizona and New Mexico with minor production in Nevada, Texas and Utah Good bet US production will top 1 billion pounds by 2018 Demand remains strong in all markets but especially in China. China takes 1 out of every 3 nuts produced in the US US industry is dominated by one large grower/processor Health message and active lifestyle is driving demand

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7 US Pistachio Production Millions of Pounds

8 Millions World Pistachio Production USA Iran Turkey Syria Afghanistan

9 Millions US Export vs. Domestic Shipments Export Domestic *Estimated

10 Millions US Shipments by Regions / / / / / N. America Europe Asia Middle East/Africa Other Central/S. America

11 Crop Year Analysis 2017 crop once again proves we can not estimate crops Iran had an off year Total world supply topped at 1.2 billion pounds and market did not collapse Market has remained fairly stable since harvest Grower returns will be less but still attractive Health message and expanding middle classes worldwide are key drivers of demand. Exports, especially to China, continue to take majority of the US produced pistachios We do expect processing side of business to change in the next few years. Biggest challenges are water availability, increasing labor cost, labor shortages and uncertain trade policy.

12 Pecan Industry

13 Commodity Overview Pecans grow in 15 states from California to Florida Much of Mexico s production comes to US for shelling Most new plantings are in Western US with orchard rehabs happening in Southeast US. Industry recently formed a Federal Marketing Order Will see increasing competition from countries such as South Africa, Australia and parts of South America. Industry has been plagued by stagnant production growth. We are seeing fundamental changes happening in the pecan industry.

14 Million (Inshell lbs) US Pecan Production

15 000 pounds inshell 700,000 Total Supply Components US and Mexico 600, , , , , , Sept 30 Carry In Crop size Mexico Total Supply

16 Millions World Pecan Production USA Australia Mexico S. Africa 0

17 Millions US Exports / / / / /2016 *Countries included China, Hong Kong and Vietnam

18 Crop Year Analysis Supply was slightly less than expected Grower prices this year increased rapidly on speculation crop was short Production in Mexico helped to close the gap and lower prices. Some processors may have issues with high priced inshell pecan inventories Pecans are currently one of the higher priced nuts in the marketplace

19 Walnut Industry

20 Commodity Overview English walnuts are grown in California China grows almost as many walnuts as the U.S. but all of their crops are consumed internally and they continue to be one of the largest importers for U.S. walnuts to meet their supply demand. The California Walnut Marketing Board has increased their marketing budget to be more inline with the industry as they grow worldwide interest. The U.S. crop continues to grow each year and we continue to see new plantings each year statewide.

21 Thousands US Walnut Acreage Bearing Non-Bearing

22 Millions US Walnut Production 1,600 1,400 1,200 1,

23 Millions World Walnut Production USA China Turkey Chile Ukraine

24 Millions US Export vs. Domestic Shipments Export Domestic 200 0

25 Millions US Shipments by Regions / / / / /2016 0

26 Crop Year Analysis February walnut receipts were at 679,225 tons which is up from the initial estimate of 670,000 tons. Pricing has remained steady with substantial market support even with another record crop. Demand continues to remain strong and the industry is close to being 100% committed with 5 months until new crop. New varieties continue to be planted and developed in order to meet worldwide demand.

27 General Comments Demand for nuts is growing as the health message continues to grow Expect increased promotional activity across the nut industry New buzz word is sustainable portable protein Nuts may avoid some labor cost increases through mechanization. Much of the nut industry is export driven. Concern remains over uncertain trade policies and protectionist rhetoric. Grower returns will moderate but still remain attractive Expect more interest in expanding production in other states and countries as California becomes less attractive The old adage in land value still remains Water, Water, Water!