Almond Market Update - January 20, 2021
We have had another warm week in California absent of any rain or snow. As forecasted last week, we saw temperatures in the valley reach into the 70’s. This is well above normal for this time of the year. As California depends on the snow pack in the Sierras for 50% of its water supply, this could be a significant impact to our water availability if the storm door does not open up soon and allow those “Pineapple Express” storms into California. I am not referencing the movie, I am referring to the storms moving from Hawaii to California, heavy with moisture.
The days following the Almond Board’s release of the December position report have been relatively quiet, as the market works to absorb the numbers and find itself. While the numbers are strong, there is a long way to go and we cannot afford to miss a beat. If we simply look at the numbers and the results thus far registered, the direction may be clearer for a path forward.
I will repeat from last week that the Industry has shipped 1.284 billion pounds YTD and is 22% ahead of last year at this time. This was a must in order to move what we now have all but confirmed to be a 3.0 billion plus pound crop. The goal for the remaining season should continue to be the same: to ship and sell at the same pace ultimately shipping around 2.87 billion pounds with a targeted carry out of approximately 580 million pounds. This would be spectacular and no one would be complaining. To do this however, both buyers and sellers must remain engaged.
With the bloom just weeks away now, attention has turned towards monitoring the orchards and our weather. Many of the pundits will weigh in on their prognostications, myself included. However, we will not lose sight of what is at hand with the current crop. Regardless of what is coming in August 2021, we must continue to do our due diligence and not forget what got us here. Which is, the versatility of almonds, consumer demand, and historically great values not seen in many years!
Week 3 Update:
- The first five months of the 2020 crop year have all been record shipments. Judging by all indicators, January will once again follow suit.
- If December’s new sales of 172 million pounds is any indication of continued demand, the industry is in great shape to hit all sales goals needing to average ~100 million pounds of new sales per month from here on out.
- New innovations continue to pique our imagination as almonds become a growing factor as plant-based proteins grow in popularity lending themselves to health-based clean living, well balanced diets and better for the environment trends.
- Dare I say, there may not be as much relevance to this year’s bloom than in previous years? With a 3 billion pound crop, comes an even larger carry-over. So regardless if the new crop is off a hundred million pounds versus last year, we may have close to the same amount of almonds to sell again for next year.
- With some growers having gone off the market last month, the industry cannot miss any opportunities to going forward.
- With all this good news, there are still many issues as it relates to export shipments, freight costs increasing seemingly out of control, all of which may impact shipments sooner than later.
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