Almond Market Update - October 7, 2021
As we move quickly into October, we have seen only subtle changes to the weather. It looks to be an Indian summer in California. While there was a chance of rain this week, it only resulted in some high clouds and slightly cooler temperatures. However, we are expected to be in the mid-70’s this upcoming week. These cooler temperatures will be much appreciated but what we really need is rain. As a result of stagnant air in the valley it has filled back up with smoke again. This smoke is making it difficult for many to breathe and a constant reminder of the forest fires that continue to burn throughout the Sierras.
September went quietly away with no significant impact to the marketplace. It will be interesting to see what new crop sales were for the month. Sellers continue to hold off selling aggressively as buyers make bids that are met with resistance. There are some packers that are holding off on any new offers until after the first of the year. This is because of a fear of the continued drought and expected increasing price pressures. With that said, warehouses continue to fill up with the new crop harvest and eventually the room to store will become increasingly difficult to find.
The almond kernel sizes continue to also be of great concern as even the pollinizers now making their way into the system. These are also demonstrating to be off from their usual sizes in some area. Even the Monterey variety which is known for larger sizes has not been immune to the drought conditions and excessive heatwaves we experienced through the growing season. This appears to be contributing to the loss in crop size, as most growers are resolute that the crop will indeed be well below the 3.1 billion pounds we harvested last year.
Week 41 Update:
- Nearby commitments have continued to be strong and are being held back by shipping issues. Some handlers will refuse to sell more at these low prices while they try to get their product that they’ve already sold shipped out.
- The September shipment report will be released next week on October 12th. Even with all the shipping issues the industry has been experiencing over the past year the industry has continued to set/come near previous records.
- Lower prices are not going to fix the shipping issues the industry is experiencing. The growers know this and will continue to hold firm. With the drought fully having it’s grasp on the west; a methodical approach will be necessary to manage the 2021/2022 crop years as one.
- With a back log of shipments both at the ports and at destinations, pricing may come down to move the local stocks, even if only temporarily. The industry cannot afford to miss too many shipping records before it starts losing out on consumer consumption.
- New crop stocks are now on hand and there are limited ways to move it. The costs to hold continue to increase, not to mention the lack of space to store this product.
- With the industry undersold, some handlers will be forced to sell soon. The market will not want to completely miss out on high shipments in the near term.
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