Almond Market Update - July 8, 2020
This week brought great anticipation of the 2020 USDA’s NASS Almond Crop Objective Estimate. This year the estimate was directly in line with the growers Subjective Estimate of 3.0 billion pounds. This leaves little doubt or question in anyone’s mind, we will have a record crop! Based on the current estimate of 1.26 million bearing acres, this represents an average yield per acre of 2,380 lbs.
Most interestingly, the estimate predicts an increase in the Nonpareil variety of 24% over the current crop year, or 1.30 billion meat pounds. The Nonpareil may then represent 43% of the overall crop production if this holds true.
We still have the June position report to be released this week on Friday, July 10th.
Week 28 Update:
- The objective estimate at 3.0 billion lbs. has already been baked into the current market and is considered a non-event. We can consider that it rubber stamps what has already been thought for some time. This should act as a stabilizing factor.
- Current market levels represents a great value and will spur on new innovation and consumer demand. The market has been waiting for this report, so buying may now start. Price elasticity has been stretched to the limit. Lower prices will have little effect on further demand.
- As we are below the cost of production for most growers in the industry, we will continue to see significant selling resistance at lower levels.
- The trend continues with concern for market demand due to COVID-19, and rightfully so.
- Buyers may proceed with caution if they cannot understand where their future demand may be coming from.
- It remains to be seen what increase in demand we will see from key markets such as India, the Middle East and China. These markets will play critical roles in affecting the ultimate carry-out for next year.
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