Almond Market Update - August 18, 2023

By: Richard Andonian

As a reminder to all our customers, for any of your organic almond needs, please reach out. We have many options and are happy to discuss any of your custom needs as well.

It has been hot and humid out West for the last week, with temperatures hitting the low 100s all week long. The valley is anticipating a rainstorm to come through early next week, an aftermath of Hurricane Hilary. To what extent, we will wait and see, but it may prove to be a non-event. With the crop already late, it may delay some growers in its path from shaking their trees. While the almonds are safe on the tree, it is not good if they are on the ground and get wet.

Early shaking and quality testing have indicated a higher level of serious damage in some orchards. Although this is typical for the earliest areas to be harvested, it may be higher than in previous years due to some growers laying off spraying this year due to the low return to the farm. Additionally, there are abandoned orchards in some areas that can also lead to infestations, which then spread to adjoining orchards. The early indications of all of this may be signaling hesitation among some handlers regarding the willingness to sell high-quality grades at this time.

Last week, as reported, the Almond Board of California released the final "Position Report" for the 2022/2023 crop year. Total shipments for the year ended at 2.565 billion pounds, down -2.63% from the previous year's 2.634 billion pounds. For the month of July, the industry did end strongly, with 187 million pounds shipped. This is the second-largest July in history and should be noted as shipments start to trend up. With strong exports last month, we can expect to see a repeat in August, kicking off the new crop year with a strengthened position. The industry is expecting +210 to 215 million pounds, which will also make it one of the strongest month of August in history. With these current market levels, why not?

The total carry-out will be 791.8 million pounds, down from the carry-in of 836.8 million pounds from last year. The industry stands at 204.9 million pounds of new crop commitments. With the final position report having been announced, this has opened the door for more sales transactions to take place as we see a great deal of activity following last week’s report.

• Growing Period: Harvest has started in several areas of the state and will soon progress to all the growing regions.
• Position Report: September 12, 2023

Bullish Trends:

1. Stronger sales will play a role in helping to firm the market levels that may have hit the bottom already. New sales for July were 82.5 million pounds, stronger than the same period last year when 63.3 million pounds were sold.

2. With a lower carry-out than last year’s 836 million pounds, now down to 792 million pounds, and a flattening crop production, overall supply will be similar to last year.

3. With market levels at historic highs, this may be the best time to book any fourth quarter and first quarter needs. The risk of strengthening market levels outweigh further weakening of the market at this time.

Bearish Trends:

1. The uncertainty of consumption has caused some buyers concern regarding their future demand needs, leading to hesitancy for some to purchase too far out. As a result, we see hand-to-mouth purchasing continuing early on.

2. New crop shipments continue to be in question, as some are also hesitant to sell without fully understanding the quality levels they will have to offer. The net result, however, is underperformance on bookings, which could lead to lower shipments in the first quarter.

3. Despite extremely low pricing, the market remains flat, lending credence to lower consumption. Retail prices remain high in the snack nut category as retailers look to improve margins to offset other less profitable categories, sacrificing some volume.

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