Almond Market Update - May 7, 2021
With May already upon us, we are experiencing summer conditions in California. The forecast is for mid-90’s this week and into next week. With this unseasonably hot weather we are already seeing grass fires in pockets throughout the valley. Without being overly dramatic, California is on track for one of the driest years in modern history. Municipalities continue to increase watering restrictions and enforce them.
There can be no denying that the drought is here and will have a significant impact on the almond orchards one way or another, whether due to cost of water increasing or simply the availability of quality water. Growers will need to do whatever is possible to maintain the health of the trees through this period of time or in the most extreme of cases, let their orchards go. With the current cost of growing versus the market levels, in many cases the math is not penciling out.
In the meantime, the market has been very consistent over the last two weeks as pricing remains stable. As a result, sales have been steady. Leading up to next week, most of us just can’t wait for the April shipping report that will be a very strong indicator on how the industry will finish up the 2020 crop year. Followed by the NASS subjective estimate the next day, this will truly set the stage for expectations on the 2021 crop and the outlook for supply.
Remaining Benchmark Dates:
April Shipment report; May 11, 2021
Subjective Estimate: May 12, 2021
Objective Estimate: July 12, 2021
Week 18 Update:
- Regardless of all the shipping issues across the globe, the industry continues to find ways to move our cargo. Just imagine under normal circumstances where we might be today had it not been for all the delays.
- Pricing remains stable to last week as demand also remains consistent. While specific sizes, particularly Nonpareil 23/25 and larger are very hard to find, there are many substitutes available such as Independence that continues to gain in popularity at a cost savings to the Nonpareil.
- If you go out shopping for gluten free or plant-based products, it will not take you long to see the proliferation of grain free products using almond flour, cashew flour and rice flour just to name a few.
- With increased acreage of potentially 80,000 more bearing acres this year, even with an overall lower yield per acre the likelihood is we will have close to another 3.0 billion pound crop to sell with a potential 650 million pound carry-over. Simply put, there is a possibility the industry will have more almonds to sell than this year.
- The realization that shipping issues may remain through all of 2021, this is creating a “sailing into the wind” scenario for the industry.
- The underlying circumstances of COVID-19 continues to overshadow all markets, particularly India. Our hearts go out to all of those affected and we pray that they stay safe.
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