Almond Market Update - July 21, 2022
With only a few more days until the first harvests, we see plenty of hull splits on the trees as we walk the orchards. Growers are finishing the last of their preparations for the orchard and equipment. In some of the orchards that show the most stress, harvest may have started this week. Slow at the start, a continuous build-up of more harvesting activity will continue to escalate into the full harvest in August.
Temperatures are ranging from the upper 90’s to 105 in much of the growing regions this week, similar to last week. This is expected to continue through the end of the month. The trees are showing their most stress at this time. Growers are doing what they can to keep the trees as healthy as possible prior to harvest with what water they have.
The objective estimate is in the books, forecasted at 2.60 billion pounds. The industry welcomed what will be the largest carry-out number in history (although more manageable than expected); in the range of 795 million pounds, give or take 10 million. July represents the final shipping month of the 21/22 crop year.
The industry now stands at 2.46 billion pounds shipped for the year, leaving us trailing last year’s record shipments of 2.67 billion pounds by -7.65% year over year. Whether right or wrong, the industry is also undersold for the new crop at 236 million pounds, compared to last year's 326 million pounds by this time. If the crop is off by 300 million pounds from this year, then this was a very good outcome.
The market is only being held in check by the larger than desired carry-out as mentioned, with a short crop coming and a severe drought in play. Historically, we may have seen the market jump $0.50/lb. overnight. Instead, we continue to see only moderate firmness and some of the best values remaining in place.
Upcoming Milestones:
- Position Report: August 12, 2022
Week 30 Update
Bullish Trends:
- We saw new sales in June of 118.7 million pounds, an increase of +8% year over year of 108.7 million pounds last June. Demand is strengthening as we start to transition into the new crop year.
- Despite all the continued shipping issues, we have managed through them in recent months, and one would imagine the industry will continue to find a way.
- While other food products are short on supply and have increased in pricing exponentially, almonds remain a great value proposition and continue to lend themselves to continuous innovative trends. Just try our Smoked Milk Punch that was featured last week at the IFT First show in Chicago: light roasted almond butter with cashew butter and nutmeg….delicious! Just one of the many innovations our team is working on.
Bearish Trends:
- With the Euro having weakened against the U.S. dollar, coupled with the disruption of the Russia-Ukraine war, demand from Europe may have put buyers on their heels.
- Just when we thought logistical issues in California couldn’t get any worse, AB5 protests break out this week, shutting the port of Oakland down all week. This may take the wind out of the sales for July shipments.
- All eyes will be on harvest and how it pans out versus the objective estimate. Regardless of a large carry-out, aggressive selling may have to continue.
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