California went from the high 90’s last week to an unexpected 6” of snow in the Sierras this week. Temperatures throughout the valley have dropped to the low 50’s at night to a daytime high of 70 degrees. No one is complaining after a taste of the summer heat last week.
As reported a week ago, April shipments were an astounding 250 million pounds, up 38% over last year and driven by export sales. The excitement was short lived as the subjective estimate came out just 24 hours later suggesting a 3.20 billion pound crop coming in August. This will mostly keep a lid on what had been firming prices for the industry prior to the report, hoping to recoup losses from the low prices thus far this crop year.
The debate has already started on the prospect of a new crop being as large as 3.20 billion pounds. With California already having one of the driest years in decades and the major cost of water for many of the growers the likelihood seems doubtful. However, until we know better, we will have to market it as if it will be.
Remaining Benchmark Dates:
Next shipping report: June 10, 2021 Objective Estimate: July 12, 2021 Final shipping report for the 2020 crop year: August 12, 2021
Week 20 Update:
May shipments are looking strong and we expect to see another record shipping month. We remain on track to finish the year with double digit growth for shipments year over year.
Market levels remain very advantageous especially compared to other tree nuts. A consistent, stable market is expected for the foreseeable future.
With stable pricing, innovation continues forward as almonds expand into other categories now found throughout the center store and perimeter.
The subjective estimate of 3.20 billion pounds coupled with a 650 million pound carry-over will be another 8% growth in available supply.
Two years in a row of supply out of step with demand may keep pricing depressed and lead to unintended consequences such as reduced acreage and fall out of growers.
This could lead to a severe upswing in market levels and cause instability to the future markets.
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