Almond Market Update - June 24, 2022

Another week in the books as we move closer to harvest. Expectations are for the crop to be on time this year. This should translate to the harvest starting in the most southern regions of the state by the end of July, while further north, it is more likely to begin the first week of August. It begins to ramp up from there week after week. Of course, mother nature will have the final word and it depends on our weather over the next five to six weeks. Currently, we are experiencing triple digit temperatures with no chance of relief or cooling for the next five days. With these types of temperatures, harvest could come a little sooner.  

With the last three position reports having been as strong as they were, the industry has done a nice job putting a dent in the remaining supply. We have averaged 249 million pounds per month shipped over the last three months. We have now shipped 2.185 billion pounds of almonds as an industry, just 10% behind where we were a year ago (which followed the largest Almond crop ever harvested at 3.1 billion pounds). With a smaller crop this year, it would be expected to be off slightly. There are still two shipping months left of this crop year with June expected to be even stronger than last month.

With the objective estimate being released by NASS in two weeks, the market has become somewhat subdued in anticipation. Many believe the estimate will be in the area of 2.80 billion pounds, but there are also some that continue to see minimum irrigation being implemented, abandoned acreage (due to drought), and orchards that were affected by the freeze in February (at the height of the bloom) with little to no almonds on the trees, most of which may go unaccounted for in this report.

Upcoming Milestones:

• Objective Estimate: July 8, 2022
• Position Report: July 12, 2022

Week 26 Update

Bullish Trends:

1. Total committed inventory is slightly ahead of where we were a year ago, when we had an even larger crop. With that in mind, the last two shipping months of the crop year should remain strong, as well as the months following during the transition into new crop.
2. With almonds being marketed aggressively, interest remains high evident by the future commitments, and the love for almonds shared by consumers.
3. Despite shipping costs and logistics issues, the industry has found a way to get it done as we see demonstrated in the last three months. This should continue to be the trend throughout the months ahead of us.

Bearish Trends:

1. New crop (2022/23) sales are half of what they were last year at this time, with 231.5 million pounds a year ago versus only 128.6 million on the books this year. This may be signaling a slow start to the new crop year.
2. Domestic shipments are perhaps the most disappointing aspect to the current almond market. It may be a precursor for things to come. Despite lower almonds prices, retailers are not passing it on to the consumer, which is hurting consumption where there should be better value recognized.
3. Yes, inflationary pressures (labor costs increasing, energy costs increasing, transportation and overall overhead all increasing), continue to persist, and are contributing to this trend. Aspects of the market that the almond industry may not have control over or be insulated from.

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