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The Almond Board of California released the August position report on September 11th, please find our analysis below.

Shipments

The 2021 crop season started with record shipments in the month of August of 207 million lbs., up 7.41% over last August.

August shipments were supported by the larger carryout which meant handlers had more stocks available for early shipment months.

This increase in demand was primarily driven by export markets with 140 million lbs. exported this August vs last August’s previous export record of 127 million lbs.

India was the only major export market down in August, which is more a factor of shipping issues and vessels being rolled.

As a result, we should expect the local market in India to remain strong due to shorter supply at destination.

Domestic shipments were flat at 66.5 million lbs. vs 65.9 million last August. Domestic consumption should be expected to pick up as the country has opened back up from COVID-19 restrictions and we make our way into the holiday season. This will be a key factor to monitor as the domestic market has played a critical part in generating demand for almonds over the years.

Sales & Commitments

Commitments stand at 716 million lbs., down 32% from the 1.055 billion lbs. as of last August.

Last year sellers were aggressively pushing product given the larger crop and uncertainty around demand. In contrast, this year a lot of sellers have been off the market given the uncertainty on crop size and the possibility of another dry winter. Therefore, it comes as no surprise that sales for the month were 137 million lbs., down from the 288 million last August.

Assuming a 2.8 billion lb. crop and given the 608 million lb. carry in, total supply for this crop will be down by about 154 million lbs and therefore the 339 million lb. reduction in commitments seems in line with California’s marketing strategy.

2021 Crop Update

Nonpareil harvest has wrapped up across the state and the early consensus is the variety will finish ~15% down. Initial reports on pollinators harvest shows that they are following a similar trend of Nonpareil’s low yields and poor sizing. Early harvest acres continue to show that the areas hardest hit by water issues are paying for it with much smaller than average sizes. Crackout percentages at hullers are also trending worse than last year, assumingly a result of dryer conditions as well. As a result, we are confident that large sizing across all varieties will be at a price premium this crop year. Inshell premiums continue to erode as packers that usually don’t handle as much inshell were flooded with increased supply of inshell this year. These handlers, in an effort to make space, have had to sell into a hesitant demand side at ever lower prices. However, some handlers are not feeling this same pressure and are willing to hold creating a large price gap brand to brand.

Market Update

The ever-worsening shipping situation continues to create issues. Even with higher pricing for Oakland shipments some shipping lines refuse to enter the port to take on containers. If this trend continues it will become an industry changing event as 85% of the almond crop is shipped out of Oakland currently. With these shipping issues it has also dragged down the demand side as many customers are waiting for product shipped months ago or product they have already purchased that still has not shipped due to shipping constraints. With the industry expecting the 2021 crop to be near the objective levels of 2.8 billion we see the shipping issues along with weather forecasts for the 2022 crop year as being the biggest variables for pricing going forward.


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