Almond Market Update - October 1, 2020

We had a small window of time last week with relief from the smoke, but it was short lived.  Two major fires erupted over the weekend.   Once again we have had uncontrolled fires burning through Napa, causing destruction and evacuations in the region.  Readings on the trusty phone app show severe outdoor air quality.   The sun is once again muted as we experience heavy discharge of smoke and ash reminiscent of last year and the year before.   Yes, it is becoming all too common of an occurrence.

On a positive note, the almond market remains resilient.  Prices remain steady as we now have September in the books and we make our way closer to the September shipment report being released on Friday, October 9th. 

Last September the industry shipped 196 million pounds, which was the second largest September shipment amount on record.  The strongest September historically, with 201.5 million pounds shipped, happened in 2016.  These are benchmarks and the reason to bring them up is only to see where we have been and where we are going.  Expect to see this record shattered as demand has been very strong as more and more pipelines are filled after months of closures. 

The harvest carries on with over 60% of the crop in and either at a Huller/Sheller or at the processors.   We also continue to see the trend toward smaller sized almonds throughout each variety now.   Some processors are reporting as much as 50% less 23/25 and larger kernels than last year at this time, while the opposite is true for the smaller kernels being up with over 50% more, making up the differential.

Week 40 Update:

Bullish Trends:

1. The industry is so well sold that we must consider filling the business that is on the books with the sizes already committed to. Pricing has increased on 23/25 and larger over the smaller sizes creating a significant price gap of $.35 to $.40/lbs. differential now.
2. Demand remains steady throughout the other markets with local stocks only keeping up with the demand.  Containers arriving at the ports are for the most part spoken for and the balance is in place as it should be.
3. Every week more requests are made for ingredients for R&D on new projects.  The future is bright for innovation and plant based products. Healthier eating is on everyone’s mind more so than ever, this is a trend that is here to stay! 

Bearish Trends:

1. Prices remain low and may have to recede back further if shipments start to slow down following the mad rush for the holiday season.
2. With smaller size almonds there will be demand gaps that cannot be met. Not everyone can switch to smaller sizes overnight.  Missed shipments are hard to make up.
3. There are still no guarantees that all markets can remain open, as we are already seeing COVID-19 rear its ugly head again throughout all markets.

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