Almond Market Update - August 20, 2021

It may sound like a broken record (sorry for the old school reference, you millennials may have to google it), but California remains dry, smoky, and dusty. Our brave firefighters continue to battle raging forest fires and while new fires pop up, previous ones remain uncontained.  We have had a break in the temperatures in the last two days, which has been a blessing for those working in the intense heat and it really does make a difference from the 100+ degrees we had seen previously.

Almond harvest is now in full swing with all regions fully engaged.  The feedback we continue to hear is that sizing is trending down from last year.  The average size of Nonpareil at this time last year being a 27/30, today is averaging 30/32. The Independence variety, which tends to be a larger kernel on average, is also sizing smaller so far.

This has caused many growers to hold off on selling at the moment until more data can be compiled. Understandably so, as no one wants to be put into a situation of not being able to deliver what is promised.  This will be a season where flexibility may be necessary.

With July being another month of record shipments for both domestic (up 4% over last year at 70.9 million pounds) and export (up a whopping 42% over last year with 158 million pounds shipped), the 2020 crop year finished up 22% with 2.898 billion pounds shipped for the year.

Week 34 Update:

Bullish Trends:

1. Most processors are fully booked for September forward and half way into October now.  With the EU coming back from vacation, they are jumping into an already hot market.
2. It appears now that the carry-out once thought to exceed 750 million pounds will now rest at very manageable 597 million pounds. This also reflects potentially having less almonds to sell this year versus last year.
3. Our water supply issues are not going to magically disappear, even with a good winter. Water issues remain at the top of mind for every grower of all types, not just tree nuts.

Bearish Trends:

1. It is so early in the harvest, why are we even talking about kernel sizes?  As the harvest moves up the valley we should see this improve along with yield.
2. Pollinizers have yet to be harvested and they represent 60% of the crop and can make up any shortfall found in the Nonpareil.
3. The great shipment numbers from last year are already just a distant memory. The industry has to prove itself all over again.  With firming prices continuing that will be a challenge all in itself.  Stay tuned for the September 10th report.

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