Almond Market Update - August 27, 2021

With just one week of August left, almond harvest is in full swing up and down the state. News of smaller kernel sizes continue to dominate the conversation.  At this point, one would have to believe that the larger size kernels will be even harder to find than they were last year.  As a result, a larger spread is forming between the various sizes. 

It is clear now that the Nonpareil crop is off this year, with reports not improving as we have gotten further along into harvest. With the Nonpareil variety making up such a large percentage of the crop, one could see how the Objective Estimate of 2.8 billion pounds can quickly become a reality.  It is still early, but not too early to discuss these factors, as marketing decisions have to be made now on future information unknown. 

Over the next several weeks we will start to see the other varieties harvested (the other 60% of the crop) and come through the huller/sheller operations. This will add additional data points desperately needed to outline the landscape we will be working with for the 2021 crop year. The story has not been told yet by any means.

Our California fires continue to burn.  The Caldor fire is burning uncontested as more and more homes are at risk, as it makes its way to Lake Tahoe.  Many have been evacuated of course.  Highway 50, the main entrance into South Lake Tahoe, has been closed for over a week now. A startling 197 square miles are now scorched. To give you a perspective, this area is larger than all of Los Angeles.

Week 35 Update:

Bullish Trends:

1. Supply may be impacted more than previously thought. With the Nonpareil being off and kernel sizes smaller, this may lead to higher priced larger kernels. 
2. Compared to other tree nuts, almonds are still the best value by far. These prices are still a bargain compared to historical levels and products are a first choice by most consumers.
3. Almonds remain the most versatile tree nut available, allowing for multiple forms such as diced, sliced, slivered, blanched, roasted and, of course, almond butter.
    

Bearish Trends:

1. There is a good chance that once the harvest is complete, all will be good again.  It is too early to be overly concerned with sizing at this point.  It usually improves with time.
2. Pollinizers have just started to be harvested and they represent the bulk of the crop.  They have the potential to make up any shortfall found in the Nonpareil.
3. With the August shipment report coming out on September 10th, we will see what the higher market levels have done to demand.

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