Almond Market Update - September 11, 2020

For those of us in California the wildfires remain centerstage, as our skies across the state are filled with smoke and ash.  There is literally nowhere to hide from it or any area that has not been impacted.  But, we are resilient and hope our lungs will be as well.  

The Almond Board released the August shipment report this morning, marketing the first month of shipments for the new crop year 2020.  While we were expecting a strong month, this one exceeded expectations. With 193 million pounds shipped, this puts the market 30.7% ahead of last year at this time.  Export shipments were up an astounding 49% over last year with 127 million pounds versus 85 million the year before. Domestic shipments were a more modest increase of 5.5%, 66 million pounds versus 62.5 million from last year.

Assuming a 3 billion pound crop with the carry over of 450 million pounds (a supply growth of 20.7%), our industry goal this year will be to sell 2.87 billion pounds of almonds, growing consumption by 21%.  This allows for a 525 million pound carryout.   The industry is well on it’s way with commitments at 1.06 billion pounds today, representing over a third of the crop already committed before we are finished with harvest.

Harvest continues with the Nonpareil variety coming to and end and we have now moved to harvesting the remaining varieties.  Meanwhile the Hullers / Shellers are busy shelling out the Nonpareils.  The turn out and yield has been disappointing with average sizes being between 27/30 and 30/32.  As a result, offers have been hard to find on the larger sizes.  Historically, the larger sizes have come along later as more and more Nonpareil are shelled out and accumulated.  Early indications, however, show poor results especially when comparing to the previous season.

With such a strong August report, expect to see a firming across all sizes and varieties. There is still a significant amount of almonds to sell, and prices remain a significant value compared to all the other tree nuts.

Week 37 Update:

Bullish Trends:

1. All the markets across the world have come back to life.  The August shipment report shows the incredibly robust nature of the almond industry.
2. We have seen activity strengthen throughout India, the Middle East, Turkey, and China.  The EU has also shipped 30% ahead of last year at this time.  Domestically speaking, the activity has been consistent and reliable.
3. Initial harvest reports have not matched up to the strong expectations, causing many sellers to pull off of the market for time being.

Bearish Trends:

1. The almond industry will need to grow shipments by double digits this crop season to avoid a large carry over into next year.  With over 30% of the crop committed to, many have already booked their needs and there are still market segments that will not be coming back to the market for some time to come, mainly food service.
2. COVID-19 remains a major factor. (And you just don’t know how much I can’t wait to never ever have to mention it again!).
3. With a 3.0 billion pound crop coming evident by the receipts already 36% ahead of last year, a 20% growth in supply is a lot to handle in a single season, even for the almond industry.

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