Almond Market Update - January 27, 2023

By: Richard Andonian

California continues to have a respite from the rain and snow experienced during holidays and through most of January. As much as we need it, it has been a welcome break, as clean up throughout the state continues from the aftermath. As January quickly comes to an end, we will start to look forward to the February bloom, which is right around the corner now!

Last week I went through the current status of the water supply throughout the state, at the major reservoirs and lakes. While it is a great improvement, as the experts have warned, one winter is not going to make up for four years of extreme drought. Having said that, for the immediate future California will benefit this year, and the legislature will debate on how to address a 50 year old system that has had no increases in water supply added while the population has doubled in that same time period. Growers of all types will lobby for water improvements and support. The almond crop alone has grown exponentially over the same time from a 500,000 lb. crop to where it is today, call it 3 billion pounds for the sake of argument.  

As the industry sits at a little over 1.04 billion pounds shipped to date in the current crop year, and just under -2% behind last year at this time, almonds are perhaps at the lowest values anyone has seen in recent history.  It is hard to imagine any further slipping, and we have in fact seen some firming this week. 

With such low returns expected for the growers and cost of production remaining high, one would imagine farming practices to be somewhat restrictive as economic realities set in. Despite the possibility of more water being available, there may be a rationing of fertilization, fungicides, insecticides and perhaps even bee hives for pollination as some growers may be forced to cut back.

Click here for the latest almond position report!

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

Bullish Trends:

1. January shipments are expected to be stronger than what the industry has been able to achieve in the last four months, which should continue to improve the supply situation.

2. Should the above occur, the industry will be further shipped than last year at this time which has not been the case since last August.

3. We may have seen the bottom of the market reached this week as sellers ask for higher bids and remain firm in their offerings.  Expectations are for demand to continue in what was an active market through January, as buyers take advantage and lock up their needs.

Bearish Trends

1. Domestic shipments for January will be paid close attention to as shipments fell off the shelf last month, down -18.4%.

2. Chances are supply may remain out of sync with demand this year, keeping pressure on remaining stocks, especially the pollinizers and manufactured segments.

3. Despite inflation the economy continues to grow, as reported this week. While great for some sectors, other sectors will experience recession.

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