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Almond Market Update - April 16, 2021

There has still been no official announcement of a drought in California, but it is only a matter of time.  We continue to have dry conditions throughout the state.  To date, we have had 812 wildfires in 2021, double what we had at this same time last year.  Climate change is considered the key driver behind this trend.  Warmer spring and summer temperatures, reduced snowpack, and earlier spring snowmelt create the longer more intense dry seasons.  This in turn increases the moisture stress on vegetation and make forests more susceptible to severe wildfire. In fact, the fire season has increased by as much as 75 days across the Sierras and translates proportionately to the forest fires across the state.

Last week the Almond Board of California released the March Shipment report.  The industry shipped an astounding 266.65 million pounds last month which far exceeded the industry’s expectations.  This is 28% ahead of last March and is the second largest shipment month of all time for the industry. This was driven by export sales and despite shipping issues around the globe the industry found a way to get it done. In addition to the strong shipments, the industry added an additional 191 million pounds of new sales during March.  This was a 10% increase in sales over last March. 

We now stand at 811 million pounds of committed inventory (sold but not shipped), well ahead of last year’s 555 million pounds. 690 million pounds remain uncommitted, which in all fairness is greater than last year’s 564 million pounds at this time due to this year’s larger crop.   Fast forward, industry sentiment is that we will continue to break shipping records over the course of the next four months and end up with less than a 690 million pound carry-over.

The next important dates to note:

Acreage report: April 22, 2021
Subjective Estimate: May 12, 2021
Objective Estimate: July 12, 2021

Week 15 Update:

Bullish Trends:

  1. We have seen several independent sources state their crop estimates for the 2021 crop.  These are ranging from 2.76 billion pounds to 2.86 billion pounds, with one right in the middle at 2.80 billion pounds.  Assuming a carry-over under 700 million pounds and a crop of 2.8 billion pounds, we potentially will have less almonds to sell in the 2021/2022 crop year.
  2. Pricing remains very good with expectations for market levels to remain trading in a narrow band for the remainder of the current crop, firming moderately.
  3. As shipping destinations and market segments (such as food service) continue to open up this year, expectations are for increased innovation and growth in traditional product lines.

Bearish Trends:

  1. With only four months remaining in the current crop year and the shipping issues continuing to be relentless, is it really conceivable for record shipments to continue?
  2. The USA, being the largest single market, is trending down and may not recover in time.  Sadly, many business have closed with no signs of re-opening.
  3. With the 2020/2021 crop settling in at +3.1 billion pounds, much more will carry into the fourth quarter than will be recognized by reports.  New crop sales and shipments in the fourth quarter are bound to be sluggish at best.

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