Almond Market Update - June 10, 2022
We are right back to the hot summer weather we would expect for this time of the year; a high of 105 degrees is forecasted today throughout the valley and growing areas. Irrigation is vital in conditions such as this and growers will be busy making sure their trees are well fed.
The State announced new water restriction guidelines this week minimizing the amount of water that can be pulled from water ways for irrigation purposes; an effort to protect our drinking water. This may impact many of the water districts throughout the growing area. Growers will need to rely on their own wells and, of course, any other sources they are able to borrow from.
Today the Almond Board released the May position report. The industry had the best shipping month of the year thus far hitting 257.55 million pounds shipped, up 17% over last year’s 219.4 million pounds. This follows the last two months of 245 million pounds. Export shipments dominated with 193.4 million pounds shipped, up 29.4% over a YAG’s 149.5 million pounds. Meanwhile, domestic shipments continue to disappoint with 64.1 million pounds shipped, down 8.2% from last year’s 69.9 million pounds.
The industry has now shipped 2,186 billion pounds, down 10.7% from a year ago. Three months ago, we were more than 16% behind last year, and a billion-pound carry-over was being discussed. With June and July remaining to ship, it is conceivable the industry can bring down the carry-over to well under 800 million pounds…dare I say even below 700 million pounds with two more months to go?
- Objective Estimate: July 8, 2022
- Position Report: July 12, 2022
Week 24 Update
- The industry added on new sales of 116.8 million pounds for the month of May; a 12% increase over last May’s 102.9 million pounds. Sales continue to trend positively late in the season.
- With sales continuing to trend positively as we approach the new crop year, on hand inventory may not be as heavy as last year, leading to consistent shipping months from this point forward.
- Clearly logistics issues continue, however, the industry has responded as well as help from the USDA with incentives for shippers to provide containers to the industry.
- The industry still has a lot of almonds to ship and faces increasingly higher costs to do so. Although a dent has been put into the carry-out, what remains will still be unprecedented.
- With inflationary pressures growing every day, consumers are forced to purchase only the essentials. Will almonds fall into that category?
- Pressure will remain on the industry for some time from multiple directions:
- drought concerns and pressure on sustainability;
- cost to grow with inflationary pressures; and
- supply out of pace with demand.
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