May shipments continued the positive shipment trend with an all-time record set for May shipments at 57,748 tons. This is 29% higher than the previous record for May of 44,478 tons, set last year. This is undoubtedly a large step in the right direction, and has lowered our carryout projection to roughly 120k tons. It’s worth noting that the revised crop acquisition report, which added 9.6k tons to the total estimated supply, prevented us from lowering the carryout projection even further. The reported purchased commitments have slowed down for the month (13k tons in new sales versus 47k tons in April), but this is most likely due to less inventory being available to buy. The 2021 crop is now 98.3% sold and the total supply 86.7% sold. If the current shipment trend holds, it is possible we get the carryout to just under 120k tons; however, at this point the main constraint remains in getting the commitments on the books to actually ship out.
It is still too early to definitively say what the 2022 crop season will bring. However, it is already clear that overall global supply will be up, driven by a larger crop in China. With this in the forefront of our minds, it is important that the California walnut industry continues to sell and ship as many walnuts as possible, while also keeping a focus on driving new product innovations. Given the low price environment, we are likely to be in for the near term. Now is the time to focus on new product development and also market segments with low penetration, such as walnut ingredients.
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