Almond Market Update - September 21, 2022

By: Richard Andonian

California finally received some rain in the past 4 or 5 days. We didn't get much in the valley but some areas, like the foothills and the Sierras, received as much as 1-inch of rain. Fortunately, the almond industry had enough warning of the potential rain. Most had picked up anything that was on the ground after shaking and waited until after the storms threats were no longer an issue to resume.

The cooler weather along with extensive cloud cover was notable and helped with several of the current forest fires we have burning in Northern California—primarily the Mosquito Fire. The extended forecast over the next ten days calls for dry, sunny weather with temperatures in the mid-80’s to low 90’s.  

August receipts were less than expected with 264 million lbs. Down 15% compared to last year at the same time. It should be noted that while harvest began a little earlier this season, the pace of the harvest has been slower thus far. As a result, perhaps no judgements should be drawn regarding the crop size just yet.  In fact, it will take several more months to better determine this years crop.  Currently, it may range anywhere from 2.5 billion to 2.7 billion pounds, compared to the 2.92 billion harvested last year.

California began the new crop year with 228 million lbs. shipped. This represents the strongest August ever and exceeded even the most optimistic, giving many growers confidence in the market with anticipation of great things to come throughout the fourth quarter.

Exports were a shining star with 162.8 million lbs. shipped, beating last year's record of 140.8 million lbs. —up 15.7%! As you will see in the chart below, all major export markets, with the exception of India, reflect positive growth.

Domestically however, it is a different story. With shipments of 65.4 million pounds, this was -1.67% or a million pounds short of last August. More so, domestic sales for all of last year were down 5.4% from the previous year. A trend everyone will be watching out for in the months ahead.

New sales for August were 195 million lbs, up 42% from last August 2021 at 137 million lbs. sold. Meanwhile, commitments thus far are off -14% versus the same time period last year:

• Position Report: October 11, 2022
• Position Report: November 11, 2022
• Almond Board Conference: December 5 through December 8, 2022

Bullish Trends

1. With strong August shipments of 228 million pounds (up +10%), market levels remain firm despite a lack of buying interest
2. With patience from the growers, the market will start to function as normal. The crop may be smaller than expected and finding good quality and grades desired will help fuel market activity
3. We are seeing promotional trends on almonds and other tree nuts at retail which will help to drive consumption to consumers. That, along with almonds being the most versatile nut promises a long-term future

Bearish Trends

1. Commitments are down as buyers are covered for the time being. This will put a strain on production and storage
2. While August was a strong shipment month, sentiment is that September may give back any gains made pulling YTD shipments down below last year
3. Economic pressures remain with inflation taking its toll on all the markets. Add to that the exchange rates, with the strengthening US dollar. It spells hard times for the industry relying so much on export business

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