Almond Market Update - August 25, 2023

By: Richard Andonian

Thank you to those who support the organic almond segment. Last year, ofi completed the last of our transitional orchards (we appreciate those who supported those purchases through the 3-year process), and now we have plenty of certified organics to provide you with, whether Nonpareil, Carmel Type, Mission type, and of course Cals.

According to the weather forecast, it has continued to be mostly hot and humid out west for two weeks now. Temperatures are hitting the high 90s with some areas in the low 100s, and should remain steady over the extended ten-day forecast. The valley experienced a tropical storm as remnants of Hurricane Hilary passed through the state on Friday, August 18th, dropping anywhere from 1 to 3 inches of rain in the lower part of the state, interrupting the almond harvest. While there was ample warning of the storm, it arrived sooner than expected. Some growers were unable to retrieve the almonds they had already shaken off the orchard floor. This will result in mechanical drying in some limited cases.

Perhaps the biggest impact of the storm may be seen in an even later crop due to rain delays extending the harvest an additional week, as growers stopped harvesting, waiting for the ground to dry before resuming shaking. While almonds are safe on the tree during rainstorms, additional time is needed to dry everything out. The early shaking thus far, along with quality testing, has indicated a higher level of Serious Damage in some orchards. Although this is typical for the earliest harvest, it may be higher than in previous years due to some growers neglecting best practices (such as mummy removal, insecticide spraying, etc.), all due to the low returns. Additionally, there are some abandoned orchards in areas that can also lead to insect pressure, which then spreads to adjoining orchards. Growers have hesitated this week as everyone assesses their orchards following the storm.

This month, 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 shipments for August to land around 210 to 215 million pounds, which will also make it one of the strongest August's in history. With these current market levels, why not?

The total carry-out stands at 791.9 million pounds, down from last year’s carry-in of 836.8 million pounds. The industry has new crop commitments of 204.9 million pounds. As the industry is four weeks into the new crop year, growers have paused this week to assess the light damage from Hilary. Expect to see more normalcy as we resume harvest in the days and weeks ahead.

• Growing Period: Harvest, again delayed from an already slow start, will be pushed back even further into September, bringing the crop close to 3 weeks behind a typical year.
• Position Report: September 12, 2023

Bullish Trends:

1. August shipments should start off strong to begin the new crop year after new crop sales in July were robust.

2. With such low market prices, the risk of waiting any longer is greater than the risk of further softening. This storm we experienced is a good example of how fast things can change when dealing with an agricultural crop!

3. Now that a lower carry-out of 792 million pounds is established, and the estimated 2.6 billion crop is established, overall supply is flat to slightly down this year.

Bearish Trends:

1. Purchasing has been steady but reserved, as buyers tread lightly on this ever-changing world market uncertainty.

2. A late crop and growers standing down will not help the goodwill the industry needs to establish stronger shipping trends as we head into the new year.

3. Regardless of low market levels, the nut segment remains flat, lending credence to lower consumption. Retail prices remain high in the snack nut category as retailers take advantage of higher margins to offset other less profitable categories.

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