Commodity Market Update: April 1, 2008

Apricots: The Apricot crop is smaller than last year and Turkey has had two late frosts which has caused additional negative effects on the pricing. The dollar continues to remain weak which is increasing costs for many imported products. Expect apricots to remain at the current levels through much of 2008.

Almonds: Almond pricing is beginning to lower due to a much better than average bloom. If things continue to progress positively for the bloom, we should see an even lower price new crop.

Cocoa: The cocoa market remains very unstable due to investors continued involvement with commodities such as cocoa. Add to this the poor weather conditions and a smaller “mid” crop, and it has the makings for very unstable cocoa prices. Compound chocolates remain very high due to the extreme high prices of the vegetable oils and dry milk powder.

Coconut: The coconut market was starting to recover from the disastrous weather over the past 6 months in the growing regions. However, with the continued high prices of fuel raising freight costs and high demand for coconut oil, desiccated coconut pricing is increasing.

Cashews: Cashews have become very expensive due to strong consumption and a Brazilian crop that is feared to be off by as much as 40%.

Cranberries: Cranberries have become one of the most popular dried fruit and bases for fruit concentrates. Demand is exceptionally strong and pricing has reflected that. To make things even worse for 2008, the cranberry crop is less than last year.

Oats: Oats remain very high. Usually there is lower pricing in late winter and into spring. However, this year investors took hold of oat futures and have wreaked havoc with the pricing. The oat crop is actually quite good this year. However, they remain at a high price because investors are buying up oat contracts, and only leaving so much for everyone else. This is causing an extreme spike in pricing. Unfortunately there is no relief in sight at this time. Add to this the continued demand for corn, which has increased pricing of all grains.

Peanuts: Peanuts are usually relatively consistent, but this year the weather has not been very helpful. Drought across the southeast has severely hampered the peanut crop. Pricing is up considerably and it does not look good for the near future; as peanuts could be cut out of the planting process because more farmers may change over to planting more profitable wheat and corn.

Pecans: Pecans have come down considerably due to the large crop. However, some of the larger halves are not as prevalent with this crop making them more expensive.

Pineapple/Papaya/Mango: Tropical fruit pricing remains high due to poor crops, high demand, and the low value of the US dollar.

Pistachios: The California pistachio crop has made a turnaround in pricing due partly to sluggish demand. Expect to see some lower pricing.

Raisins: Raisin pricing was expected to remain stable, but has firmed a little due to availability and a larger price guarantee to the farmers for the new crop in the fall.

Sugar: Sugar was lowering in price through the first quarter. However, the horrible fire at a large sugar refinery in Georgia has resulted in a spike in pricing. Prices have seemed to plateau but will remain higher than the first quarter.

Sunflower: The new crop of in-shell sunflower is of exceptional high quality and the demand is very strong. Sunflower kernel is especially difficult to obtain without a contract due to the high demand of the in-shell product. (The demand for land to grow corn continues to drive up pricing of other grains and seeds such as sunflower) On top of everything the foreign crops have been terrible. Expect higher prices for 2008.

Walnuts: The new crop walnut pricing can be easily classified as the worst ever. The crop size was good. However, there was absolutely zero carry-in and demand is very strong. Plus exports are higher than ever before because of increased demand overseas and a weak US dollar. Walnuts are far more expensive than pecans! Walnuts are at prices never scene or even thought possible.

Wheat: Wheat pricing continues at historic highs. World demand is more than supply, and a situation like this can only mean high prices to try to reduce demand. Expect the volatility of wheat to continue through second quarter.