Almond Market Update - October 29, 2021
Each week we start off talking about our weather here in the west. This is important to emphasize how critical it is to agriculture in the great state of California; and what weather we had this weekend! I believe just about every record in the books was broken in the 24 hours that followed a beautiful Saturday!
By midnight the mood of the day changed dramatically. With a flip of the switch, we began to hear the rain fall and fall and fall. It continued to fall without any interruptions throughout Sunday and into the night again. Without stopping, the rain continued to fall for well into Monday and continued into Monday evening, as anyone watching MNF saw for themselves.
In the end, the two day “atmospheric river” had dropped over 6 inches of rain on the Northern part of the state (more than received all of last year), two to four feet of Sierra snow, and we saw most if not all the reservoirs inch up ever so slightly. I also heard today that Lake Tahoe is back to being at its normal water level, which is remarkable. I am also excited to hear all the wild fires have been reduced to a smolder. The fire season is over with for the time being.
What does all this mean in regards to the drought? It is a blessing to receive what we did but by no means is the drought over. This was one storm and while it goes a long way in helping, it is not the end to the drought. Scientists warn that it is still a La Nina season in the Pacific and predictions are for a dry winter. They go on to say we will see wide swings from one extreme to the other due to global warming, therefore a storm like this is not a surprise. Sure enough we have already seen +70 degree temperatures following the storm. How long can the snow last in the Sierras this early if it does not get colder very soon? As our spring reservoir levels are dependent on the snowpack we can create during the winter.
The Almond market has remained relatively quiet as we continue to see shipping issues at the ports with major backlogs of container ships just sitting out in the harbors. This is a taste of what is happening down in Los Angeles and Long Beach. “Marine Exchange Ship Report 10/18/2021: 157 total ships inport LA/LB includes 100 at anchor or holding areas & 57at births. Of the 157, 97 are container ships including 70 at anchor or in holding areas & 27 at berth” and it goes on…
Needless to say, shipping issues remain of major concern for every industry including ours. Higher freight rates also continue to add costs into the system. This has led to a slowdown in shipments that the almond industry is not insulated from.
Growers are reluctant to sell too far into the crop year with uncertainty of the harvest from a perspective of crop size, kernel sizes, and the drought. This has led to the industry being well behind in commitments. The crop has now been harvested and many are getting ready to sell now. As a result, we have seen a buying opportunity develop. Other than the larger size kernels which will remain scarce this year, pricing has once again become a great value for those with flexibility.
Next Shipment Report: November 11, 2021
Week 44 Update
- Expectations are for a 2.8 to 2.9 billion pound crop this year, off from 3.1 billion pounds from last year. This has led to firmer prices than the average of last year, however they are still below the historical averages.
- Demand is there and now with the market settling in buyers can purchase with confidence. This is a buying opportunity, if the drought continues this winter, that may change in the first quarter. January is typically California’s rainiest month, although October may have something to say about that!
- While shipping issues continue, the industry will figure out a way to adapt and increase shipment numbers going forward.
- October is appearing to be another down shipment month which potentially may put the industry behind by as much as 70 million pounds in total shipments compared to the same time last year.
- With such heavy rain, it hardly feels like the start of a continued drought for this coming winter anymore.
- With export shipments all but thwarted at the ports, supply will continue to mount and exceed demand. This issue will persist for many months ahead.
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