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Almond Market Update - July 23, 2021

Wow, what a week!  Harvest has officially begun around the valley.  Trees are shaking and almonds are falling… to the ground, that is.  If we’re talking about prices, we all know that’s a little different story. It’s no secret that since the USDA/NASS objective estimate the market has been in a whirlwind trying to find itself. Depending on which side of the market you’re on, you've either enjoyed the ride or had sticker shock.

With such recent uncertainty, what is certain is the 2.8 billion pound estimate isn’t going anywhere anytime soon.  It’s going to take some time to see if in fact there is such a large reduction in supply. The industry is going to start working through harvest and evaluating whether or not the loads coming out of the orchards are larger or smaller than last year. By the middle of August, we’ll have an initial indication comparing YOY.  Certainly by November/December we will have a very good idea of the crop size.

As prices are rising, water levels are unfortunately falling. The majority of the growing regions in California have seen all but a few drops of rain since April. The 12 major reservoirs around the state have a combined average capacity of 40% as of July 21st. For comparison, our last "extreme" drought in 2014 had the combined average reservoir capacity of 60% (July 2014). With August and September being "hot" months in the valley, it’s safe to assume there won’t be any significant rainfall for the next 60 days, at least.


Remaining Benchmark Dates:

Final shipping report for the 2020 crop year: August 12, 2021

Week 29 Update:

Bullish Trends:

  1. We have now seen the markets react to new levels and they have been for the most part well received thus far.  Business is being done on a limited basis by both buyers and sellers.
  2. July shipments are strong once again and we expect to see the final shipping month finish the crop year with record shipments.
  3. Growers remain resolute in their pursuit for higher prices that may better match demand and supply.  With the drought being what it is, the next crop season could be even more impacted. 

Bearish Trends:

  1. The higher prices are sure to slow down demand in the first few months of the new crop year.  This may lead to a sell-off in November and December, should the crop be coming in larger than expected.
  2. Inflationary issues will also lead to higher prices, from a standpoint of cost to ship and grow may impact sales for next season.
  3. The shipping issues continue to thwart the industries efforts to supply goods in a timely fashion.  This could result in lost future sales as well.  

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