Simple Math – or New Math (part 2)
This will be an abbreviated newsletter since last month’s was late in getting out.
We have a series of charts and graphs that we will try to put some context towards. We feel the most interesting figures are the AVERAGES particularly the first and last 10 year averages.
1. Production really escalated come 1996/1997 both in Spain and overall.
2. We do not see a clear pattern of cycles in these numbers. Although we always had beliefs there was a clear pattern to the production in certain incremental years. The numbers do NOT show such a conclusive pattern.
3. Spain in last 10 years has really only had 2 BAD seasons. (2013/2015)
4. Spain had some very poor years in 1990-1996. Same with world production.
5. If there is a common cycle lately, is that from 2012/13 crop till this season, the Spanish crop has had a two year cycle. That would mean this year was a great year in the equation. We are not sure that is the case. As the last 10 year average has been 1,240 tons and this crop was not significantly higher than that average. (Yet HIGHER- the sample size is too small for conclusion)
6. It is apparent when Spain production is below average, the world production also comes in below the 10 year average as well.
7. The percentage of Spain’s production against world production has gone from 33% in first 10 years to 43 % in last 10 years and the total average for Spain is 39% over the 26 years recorded here.
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CALIFORNIA OLIVE OIL COMMISSION / AUSTRALIAN OLIVE OIL ASSOCIATION
COSTING BY PRODUCT – BUYING RECOMMENDATION
They remain the same as last communications. OUTPUTS in Spain are still running higher than normal. Prices still have pressure on them. Quantities offers are in small parcels. For the near term prices will be firm, and the QUESTION is when and IF the prices will fall heading into fall.
That is a very hard question to answer TODAY. My suggestions are conservative. Coverage on all items should be complete through third quarter. Some coverage of fourth quarter needs depending on your risk tolerance should be explored.
***** All these suggestions are based on a stable Euro**** we have instruments in place to keep the currency stable with the flexibility to take advantage of a stronger dollar.