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Almond Market Update - March 31, 2021

The State of California has officially claimed this to be a drought year as we are now in the fourth quarter of our rainy season.  Many water districts are setting water allocations to zero.  Drought conditions are more intense this year than last year as illustrated by the below graphs:

Drought Monitor vs. One Year Ago

It is reported that we are behind in some areas in excess of -20 inches of rain compared to a normal season.  As we head into April there is no forecast for rain on the 10 day forecast.  This looks very similar to the 2014 drought period.

The industry remains relatively quiet as many leave for the Easter Holiday weekend.  Additionally, growers and handlers will wait for the March shipment report due out next Friday April 9th to be released. As a result, next week’s activity is expected to be more of the same.

We continue to see the Nonpareil kernels harder to find this week as 25/27 and above are very scarce now and as a result the market continues to firm on the Nonpareil variety overall.  On the other hand, the other varieties such as Carmel Types and Cals are more readily available and remain flat. 

 

Week 13 Update:

Bullish Trends:

  1. The March shipment report is expected to be strong and continue on the same trajectory we saw in February when 234 million pounds were shipped.  
  2. Pricing remains at historically low levels as we see other tree nut prices rise. This will lead to more migration towards almonds with increased percentage use as ingredients and in nut mixes.
  3. With strong consumer demand, retailers remain very focused on growing their shares of snack sales and increasing category sizes.
     

Bearish Trends:

  1. Unfortunately shipment issues around the world continue, not only at our domestic ports, but also in others major port cities.  We all saw firsthand the Suez Canal blocked for an entire week, only adding to the issue.  With a shortage of containers now, time cannot be made up.
  2. Many markets are closed again due to concerns of COVID-19 and new waves of outbreaks. This has brought a slow-down in demand in some markets.
  3. The crop may have grown faster than the infrastructure and with another large crop coming, storage will be an ongoing issue for most of the industry.

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