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Almond Market Update - December 17, 2021

Holiday Cheers To Everyone.  We are already halfway through the end of the month and 2021 is quickly coming to an end. I recall last year at this time how excited everyone was that 2020 was almost over and how we all looked forward to the New Year and putting COVID in the rear view mirror. Well, we all have much to be grateful for and I for one look forward to 2022 and all the great things heading our way! 

Speaking of great things, California has had a large storm come through this week with over 5 feet of fresh snow throughout the Sierras, with more headed our way.  By the weekend there should be as much as 6 feet of fresh powder to take advantage of on the ski slopes. While it does not change our water situation in California, it is a start.  If this keeps up with continued storms throughout January, February, and March it will certainly help.  Please note, January is our prime month for rainfall and sets the stage. The Sierra snow pack represents 50% of California’s water supply so a strong base in the winter will lead to the valuable run offs required to supply the state through the summer months and fill the reservoirs. Without it, we will continue to suffer through our drought and water restrictions will be heightened, with many allocations to remain at zero. This may potentially lead to a smaller crop next year.

The Almond Board of California released the November shipment report. It was no surprise that with our shipping restrictions at the ports exports were sure to be dramatically effected compared to last year at this time. The industry did manage to ship 221 million pounds in November with 156 million pounds in exports down -20% from last year, while domestically the industry shipped 65 million pounds off -4% to last year. 

This now puts the industry -15% behind in shipments year to date with 872 million pounds shipped versus last year’s 1.026 billion pounds shipped. Even comparing to the 2019/2020 crop year the industry is trailing behind by -3%. Another factor to consider is our uncommitted inventory is almost 60% greater than last year. The industry will have a lot of work ahead in the New Year.

Crop receipts have now slowed and are roughly 100 million pounds behind last year’s crop receipts. This is in line with the crop size of between 2.9 billion and 3.0 billion pounds expected.

Next Shipment Report: January 11, 2022

Week 51 Update

Bullish Trends:

  1. Domestic shipments continue to trend much better than export shipments, this shows demand for almonds are there if California can improve the export shipping situation.
  2. The Almond Board announced last week at the almond conference that increased marketing that will take place in 2022, focusing even more on health and wellness.  Wellness is top issue with consumers and almonds are known to be a great source of magnesium for immunity.
  3. Expectations are for high demand through the first and second quarter of 2022 with excellent pricing on most grades and sizes.  The exception will be for those requiring larger sizes of 25/27 or larger. 

Bearish Trends:

  1. Unfortunately, shipment issues will remain a concern for exports and port congestion may stay with us for what is expected to last through most of 2022.
  2. With shipments off by -16% for November, time is now becoming an issue.  The largest shipping period has come and gone, and these same issues holding back shipments are expected to affect December.
  3. With an uncommitted inventory of 1.25 billion pounds, the industry appears to be going in the wrong direction. Realizing that pricing cannot fix the issues in front of the industry, other avenues will need to be explored to mitigate shipping issues in 2022.

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