Almond Market Update – April 2020
The Almond Board of California released the March 2020 position report
Shipments were 208.22 million lbs. vs. 184.95 million lbs. in 2019 – a new record & an increase of 12.6% (+5.85% YTD)
U.S. +31.2% (+5.2% YTD) Concerns over the need to go into isolation led to many consumers emptying the super market shelves. This spike is a refilling of the pipeline and looks likely to continue in April.
Exports +3.5% (+6.1% YTD)
Western Europe -4.8% (+8% YTD) They pulled hard late last season and this trend is expected.
China/HK/Vietnam -10% (-37% YTD) The tariffs and COVID-19 continue to take a toll on this market. They’ll be back.
India +19% (+12% YTD) There are concerns about the shut down there with COVID – more below.
Middle East / Africa +42% (+37% YTD) This region, where our Almond Board does not have any marketing programs, continues to perform exceptionally well. Over the past couple months some buyers seem to have reacted quickly to the lower prices and bought additional volumes. The recent drastic drop in oil pricing may negatively impact consumption going forward.
Japan +2% (+10% YTD)
South Korea -37% (-11%) Clearly this market is affected by COVID-19 but at some point they will need to re-fill the pipelines.
Canada +10% (+9% YTD)
Crop Receipts per reporting to the Almond Board reached 2.533 billion lbs., up 269 million lbs. or 11.9% from a year ago. USDA reported receipts reached 2.541 billion lbs.
The recent cool weather is good for kernel size development but likely means another late harvest. Bloom and post bloom conditions have been great. The alternate bearing nature of almonds, especially some varieties like Nonpareil, should not be underestimated though. Nonpareil in much of the south and west, that were very strong last season, are likely down on a per acre basis. In 2019 we learned how significant those growing regions are. Parts of the east side, including Madera County and certainly eastern Merced, Stanislaus, and San Joaquin, should come back much stronger on a per acre basis. The North should be up significantly. We see a strong Independence crop everywhere we have looked so far.
In the near future we should gain about 150 million lbs. per year from acreage alone, so some growth in overall volume is expected, but perhaps not to the extent that some were talking in January and February.
With all the rain, irrigation has not been necessary other than to put fertilizer out. Thanks to the rains, mites shouldn’t be an issue near term and catching up on fertilizing will likely be the main focus.
March Shipments exceeded expectations and was the best month vs. LY since September. (BULLISH)
March’s Record Sales were a 174 million lbs. vs. 148 million lbs. last March. (BULLISH)
Committed (Unshipped) reached 555 million lbs., up 19.6% from a year ago (BULLISH).
Uncommitted Inventory is 564 million lbs., up 7.3% from a year ago. (BEARISH but improving since last month)
Sold Position: The industry is approximately 80% sold on total supply, similar to a year ago (SOLID)
Coronavirus Impact: The largest impact of on the market currently is the temporary shut down of India. Some 37 million lbs. shipped there between February and March. Everyone is looking forward to this market re-opening. It has impacted other markets to some extent but in general the food industry keeps moving forward.
Plant Based Eating – whether you believe in and/or care about the health benefits or not, there is a trend toward increasing proportions of plant-based foods in people’s diets in many countries including the U.S. and the U.K. (where “flexitarianism” is trending). Documentaries like Game Changers (trailer to the film below) are a game changer for some people’s diets and these trends should bode well for almonds and tree nuts in general.
OUTLOOK: We believe today’s report is positive. April looks on track to be another strong shipping month. Will the boost in re-bagging business in the U.S. mean consumers eat more almonds this season, or will we give back some of these gains late in the season (as they work through the pantry/freezer stocks)? Given how significant the increases are and the positive outlook for April, it appears some of these gains will be sustained.
We see a firm outlook at this time. Given the uncertainty in the world due to COVID-19, any optimism that comes about could be suppressed to some extent. There are oncerns about COVID-19’s impact on the world economy and how that will impact almond consumption.
In these uncertain times we hope everyone is following the recommendations and staying healthy. Hopefully this brings families closer together and additional positive things come from this difficult time.
Paul Ewing Dennis Soares
Further info: March 2020 Position Report
April Position Report & NASS Subjective Estimate – Tuesday May 12, 2020
Game Changers Trailer:
In the Orchard Video: