Almond Market Update – February 2020

The Almond Board of California released the January 2020 position report

Shipments were 220.5 million lbs. vs. 209.6 million lbs. in 2019 – a new record & an increase of  5.2% (+4.5% YTD)  

DEMAND 

U.S.  +9%  (+0.1% YTD)  A new year, a new decade, are Americans eating healthier?  Plant based diets seem to be hotter than ever right now so perhaps that has to do with the recent improvement in North American shipments.

Exports +3.5%  (+6.4% YTD)  The USD has strengthened and is trading at 1.09 vs. the EURO

Western Europe +6% (+13% YTD)  There is continued solid growth in Europe.  They finished the ’18 crop very strongly in the back half so we don’t expect to see a continued 13% growth rate each month.  However, the snacking trends are very positive for the long-term.

China/HK/Vietnam  -18% (-38% YTD)  This figure is more reflective of the trade war than the recent issues with the Coronavirus.  It’s reported that Chinese New Year sales were not good for many products.

India +31% (+6% YTD)   This is a large figure for the month and not likely to reflect well on the local market conditions in India.  However, overall YTD the country is buying at a much steadier / healthier pace.

Middle East / Africa -20% (+41% YTD)  With an earlier and much stronger start to the season, this slowdown was inevitable.

Japan  +1.5% (+11% YTD) 

South Korea -0.2% (-4%)

Canada +33%  (+8% YTD)

2019 CROP 

Crop Receipts per reporting to the Almond Board reached 2.509 billion lbs., up 258 million lbs. or 11.5% from a year ago.  USDA reported receipts reached 2.521 billion lbs.  Expectations are now for final receipts of approximately 2.55 billion lbs. or possibly higher.  This appears to be the largest miss by NASS’ objective estimate in history, certainly in terms of total pounds.  At 2.55 it would be off by 350 million lbs.

2020 CROP 

Bloom is about to get underway.  Overlap among varieties appears very in sync.  Bee availability and delivery timing look good.  The areas west and south with strong 2019 Nonpareil yields appear likely to rest a bit this year.  Overall, the bud set looks excellent.  Acreage growth will continue to boost the potential supply.

REVIEW:

January sales & shipments exceeded expectations.  (BULLISH)

January sales were 210 vs. 179 million lbs. last January.  It was a tough market to get sales as so many growers and handlers were trying to get product sold during the month of January.  This is why pricing went down despite the very strong sales month (along with the crop receipt figures).

Committed (Unshipped) reached 599 million lbs., up 11% from a year ago (BULLISH).  Uncommitted Inventory is 906 million lbs., up 12% from a year ago. (BEARISH)

Sold Position:  If we have a 2.55 billion lb. crop, the industry is approximately 67% sold on total supply, similar to a year ago (NEUTRAL)

CROP RECEIPTS of 2.509 – 2.52 billion lbs., on track for 2.55 range, is bearish and likely overshadows the bullish news in today’s report.

FORWARD SHIPMENTS need to average 190 million lbs. per month or about 15 million lbs. per month more vs. last season, to get the carry out down to around 400 million lbs.    With the strong finish last season, the current issues in China, etc. this looks challenging.  However, there are some very strong plant based eating trends that have potential to surprise us demand wise.  The carry-out importance also depends on the 2020 crop outlook as sellers will be more motivated to get the carry as low as possible if there is another large crop coming, and vice versa if there are any 2020 supply concerns (which there are not at the moment).

Feel free to call or email for further discussions.

Paul Ewing    Dennis Soares

Further info: January 2020 Position Report

February Position Report – Thursday March 12, 2020