Californians made it through the heatwave last week, we are now enjoying lower to mid-70’s temperatures this week. A short respite before we are back into the high 90’s and triple digits again next week.
The May shipping report was released Thursday and represents another record month at 219 million pounds, a 42% increase over last May. This brings total shipments for the year to 2,448 billion pounds, 21.4% ahead of last year at this time. With two shipping months left, we have already exceeded total sales of last year's 2.372 billion pounds and added an additional 103 million pounds of sales for the month.
There is no reason to think that the industry will not ship any less than 2.88 billion pounds or close to it. This will give us a carry-over in the neighborhood of 610 million pounds. As a reminder, the carry-over historically has been used to cover an 8 week supply for transition from current crop to new crop.
The May report also shows new crop sales for the 2021 crop season. To date the industry has sold 231.5 million pounds which would represent 7% of the crop based on a 3.2 billion pound estimate. Most do not believe the crop will reach the estimate due to the drought and acreage coming out of the ground that has not been accounted for.
Remaining Benchmark Dates:
Next shipping report: July 9, 2021 (new crop sales will continue to be reported)
Objective Estimate: July 12, 2021
Final shipping report for the 2020 crop year: August 12, 2021
Week 23 Update:
Demand has continued to grow through the pandemic worldwide and has caught up to supply in just one short year. With markets steadily coming back, the future is bright.
We may see the effects of the drought on the new crop harvest impacting the actual supply this year, this is leading to a firming price trend.
Record shipments 9 out of the last 10 months will minimize the carry-over, making it very manageable.
With new crop sales trending behind last year’s 286.5 million pounds, growers will need to sell quickly to play catch up.
Despite the great shipping reports, a larger carry-over leads to an overall increase in total supply. Those record shipments were accomplished at lower price levels.
Industry shipping issues persist and will continue to hamper the industry through the end of the year. Freight costs are also skyrocketing and will ultimately lead to higher prices the consumers will pay.
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