Almond Market Update - January 20, 2023

By: Richard Andonian

After yet another major storm this weekend, we finally have a break in the weather in California. Since Christmas day, we have had only three days in California with no rain in the valley. Snowpack in the Sierra Nevada has reached 250% to normal and the snow is still falling at this writing. Far North the level is at 200% and in the Southern Sierra’s it is edging close to 300%.  California gets over 40% of its water from the snowpack, so it is a big deal to our watershed system and should help the state breath a little easier this summer. The question will seemingly remain, as to what the future holds however in the years to come.  But in the short term, things are better than they have been in several years.

Regarding the major reservoirs and lakes as of January 17th - Shasta, California’s largest reservoir, is at 52% capacity, compared to 34% a year ago. Folsom Lake is at 54% capacity compared to 56% a year ago. Lake Oroville is at 58% capacity compared to 44% a year ago. New Melones is at 38% compared to 40% a year ago. This particular watershed is smaller so there is no expectation for it to be full by May or June as we will expect to see in the others. Overall, things are looking good for the reservoirs to collect the snow melt in the months ahead.

The Almond Board released the December position report last Thursday January 12, 2023. Crop receipts in December were 226 million pounds. which is 34% lower than the receipts last December of 344 million pounds. We have now received 2.38 billion pound, down 11% vs last year’s receipts of 2.66 billion pounds. The sharp drop in receipts signifies the hullers are almost done with their product as they begin to run out of product. The industry sentiment is that of a crop closer to 2.5 billion pounds versus the 2.6 billion pound crop estimate issued by NASS. This is well within the estimates range, 4% give or take.

Total shipments for December were 206.35 million pounds, a pleasant surprise for the industry which had expectations of only 190 million pounds. It is the 3rd largest December in history. This will be a minimum target going forward for the months ahead.

Domestic shipments YTD remain trailing last year’s shipments down 8.7% to date. Last year the industry shipped a record 64.3 million pounds versus this year’s 52.5 million pounds down 18%. This can only point to decreased consumption at the shelf as consumers work to spread their dollars on the essentials.

Export shipments were at 153.9 million pounds, up 23.6% versus 124.5 million pounds last year. This was influenced by demand from the EU, India and the Middle East. While not a record for a December (December 2020 holds that record), it was the second best December for exports in history and points to stronger shipping execution and demand. Exports shipments are now up 1.16% year to date.

• Position Report: February 9, 2023  (Same time as the beginning of the 2023 Bloom).
• Position Report: March 9, 2023

Bullish Trends:

1. New Sales in December were up 17% which points to better days ahead for domestic shipments.

2. The Middle East continues to lead export markets with YTD shipments up 38%, and showing no signs of slowing down.  Meanwhile India also had another strong month up 37% trending towards gaining everything back compared to last year.

3. With market levels continuing to stabilize and representing some of the best values amongst tree nuts, expect to see demand increase in the months ahead.

Bearish Trends

1. Domestic shipments remain a glaring issue with the position report. This could be a point of concern to the well-being of the industry.  This is almond’s backyard afterall.

2. With the strong winter at hand, look to see the trees rebound after a harsh summer.  They have had the winter to dream of, if trees could dream. With the bearing acreage in the ground, the yields could also rebound accordingly.  

3. Until inflation is in check, and consumer spending can get freed up, the industry may have to wait longer to get consumption back in line with the over-supply we see today.

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