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Almond Market Update - November 30, 2022

California weather has turned dry over the last three weeks with no rain thus far in November. However, the cold weather we are experiencing is good for the trees as they head into dormancy for the winter. Growers have been busy with orchard clean-up, tree trimming and, for some, extensive tree removal. It will be interesting to see just how much shifting out of almonds occurs this year due to water issues and market levels; the combination of the two could mark a significant change to the market.

With the Thanksgiving holiday behind us, the industry has been somewhat quiet this week, not untypical for this time of the year. Processors are busy filling existing orders with the short month ahead of us (due to holidays). Crop receipts stand at 1.657 billion pounds, behind last year’s receipts of 1.794 billion pounds down 7.65%. The objective estimate of 2.60 billion pounds appears to be relatively accurate. As a reminder, last year the industry harvested 2.92 billion pounds. With the upcoming Almond Board of California Conference, and the December shipment report due December 13, we expect the market to remain subdued for the time being.  

While shipments for October were 215 million pounds, which was above expectations, the industry expects November to be 200 million pounds or lower. Shipment expectations remain low compared to a year ago. Export demand remains sluggish and there may not be an opportunity to make this up any time soon. With crop receipts down this year, supply can catch-up and align with the current state of demand.

Upcoming Industry Milestones

  • Almond Board of California Annual Conference: December 5 through December 8, 2022
  • Position Report: December 13, 2022
  • Position Report: January 12, 2023

Almond Insight - Week 48 & 49

Bullish Trends:

  1. A smaller crop size will help to bring supply in line with worldwide demand. Some orchards have opted out this year, which may lead to less harvesting acreage for next year.

  2. With aggressive pricing throughout all sizes and varieties, demand remains well positioned for a strong start to the new year.

  3. Buyer confidence continues, and if these lower prices can make it to the consumer level, we may see demand really take off.

Bearish Trends

  1. Current levels are unsustainable for growers, and without a substantial increase in demand, sellers will continue to be forced to accept low offers to keep the manufacturing lines filled.  

  2. Industry sales of 38% against total supply is behind where sales and commitments needs to be. Historically, the industry would be 47% sold by this time of the year (based on the last five-year average).

  3. The market continues to face a headwind with exchange rates continuing to be a concern for the industry, as well as a global recession remaining in everyone’s purchasing decisions.

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