Why fund managers apply a commodity supply framework to Select Harvests

Select Harvests is benefiting from a structural tightening in global almond supply, using the same framework fund managers apply to uranium, gold and oil.

30 Jun 2026 · 6 min read

Almond grower and processor Select Harvests is benefiting from a structural tightening in global almond supply, with Collins St Asset Management's June 2026 Article applying the same four-factor commodity framework it uses for uranium, gold and oil: demand growing globally at around 4-5% per annum, supply falling as growers remove orchards planted during the previous boom cycle, California facing environmental and production constraints as the dominant global producer, and limited easy alternatives to almonds as a category.

Balance sheet repair funds a return to dividends and buybacks

Tamim Funds Management's May 2026 Monthly Report detailed the operational improvement underpinning that thesis: first-half FY26 underlying net profit after tax rose 33% to A$29.1 million on a forecast 2026 crop of 29,500 tonnes, 46% already contracted at an indicative price of $10.21 per kilogram, with the board reinstating a 3.5 cent interim dividend and announcing an on-market buyback of up to 10% of shares. Collins St Asset Management's September 2025 Quarterly Report had earlier detailed net debt of $80 million and gearing at 15%, representing a 50% reduction in debt compared with the prior year, giving the company capacity to fund growth initiatives including kernel recovery improvements and processing capacity expansion from 55,000 to a targeted 65,000 tonnes.

The firm's preferred exposure to almonds is Select Harvests, which benefits from lower production costs than many international competitors, proximity to Asian markets and growing processing capacity.

— Collins St Asset Management, Article, June 2026

Perpetual Asset Management's July 2025 Monthly Report detailed an early test of the supply thesis: the spot almond price fell sharply following a better-than-expected USDA crop estimate of 3 billion pounds, though industry experts questioned the estimate's accuracy given the extensive tree removal and orchard abandonment following multiple years of weak prices, with various players calling for a materially lower crop of 2.65-2.8 billion pounds instead. Tamim Funds Management's November 2025 report confirmed the more bullish view was playing out, with the industry's US crop estimate trending toward 2.8 billion pounds, viewed as positive for prices over the coming twelve months, alongside the manager's own projection that a normalised 29,000-tonne harvest at current or elevated pricing could deliver EBITDA of $120-150 million, potentially doubling the stock from its $3.85 entry price.

What managers are watching next

Seneca Financial Solutions' May 2026 Article cited an unrelated but telling data point: agricultural landlord Rivco executed a long-term lease with Select Harvests at a 5% rental yield, illustrating the kind of returns available in the sector currently. Collins St Asset Management's June 2026 Quarterly Report noted the stock still trades on approximately 9 times FY27 earnings despite the improved earnings outlook, reduced debt and initiated buyback, suggesting the market has not yet fully priced in the structural almond supply tightening that could support prices for years to come.