Almond Market Update – June 2021
The Almond Board of California released the May 2021 position report
Shipments: 219.4 million lbs. vs. 153.9 million in 2020 – +42.6% for the month & +21.4% YTD
U.S. +22.3% (+3.8% YTD)
Exports +54.6% (+29.7% YTD)
Western Europe +35% (+16% YTD)
India +7% (+54% YTD)
Middle East / Africa +147% (+28% YTD)
China / Hong Kong/ Vietnam +240% (+80% YTD)
Japan +24% (-3% YTD)
South Korea -24% (+45% YTD)
Canada +25% (-1% YTD)
Central / Eastern Europe +72% (+45% YTD)
Latin America / Caribbean +45% (+68% YTD)
Crop receipts just surpassed 3.1 billion lbs. and are up 22.3% from a year ago.
The Subjective estimate of 3.20 Billion lbs. was met with widespread skepticism by most of the industry including many buyers. In our opinion. it is possible that the crop hits 3.2B this year, but we believe it is unlikely.
Pros for the 2021 crop
Excellent bloom weather resulting in great pollination activity
Good spring weather resulting in low disease pressure, low stress & mite pressure (in areas not affected by drought)
Age Demographics of the trees – increasingly more orchards in their prime with high yields
Variety make-up with ongoing increasing proportion of acreage with higher yielding varieties and variety combinations
Other ongoing farming improvements including rootstocks, tree spacings, etc.
Acreage growth continues although at a slower pace due to increased removals.
Cons for the 2021 crop
Farming spend cutbacks by some growers including fertilizer, sprays, etc.
Alternate bearing – some orchards, particularly older orchards, are resting from last season’s record yields
The Drought will affect several areas of the state in terms of yield per acre and more.
Potentially less bearing acres than forecasted. Many trees were removed after the satellite survey, and not to mention that some orchard may not make it to harvest due to lack of water.
Turn-outs are uncertain – we could be seeing thick hulls. Also, due to the drought we could smaller kernels as well as more stick tights.
May Shipments – expectations were very high and while this is an incredible figure, it’s still on the low end of expectations but we believe within range. Once again many loads were rolled by ship lines into the following month, yet exports are still up 55%.
May Sales of 2020 Crop were 103 million lbs. vs. 111 million lbs. last May.
Committed (Unshipped) stood at 608 million lbs. – up 33% from last year’s 456 million lbs.
Sold / Shipped Combined reached 3.05 billion lbs. vs. 2.47 Billion a year ago, still up 23.6%.
The Industry Sold Position surpassed 87 of total supply – just below the 87.7% a year ago.
Emerging market demand continues to impress. These markets are there for the industry to grow quicker when prices are low. Despite the ongoing tariff issues, the China region is up an incredible 80% this season. India shipments are up 54%, and it certainly helps consumption when the Indian government included almonds among immunity boosting food guidelines, to help amidst covid (Indian Government Article).
New crop (2021) sales of 231.5 Million lbs. puts the crop at roughly 7 to 8% sold depending on the crop size. In the spring of 2020 sellers were more motivated to pre-sell and sales were 286.5 Million lbs. by the end of May 2020. With the low prices and drought concerns, sellers may continue pre-selling at a slower pace. If so, the current crop will continue to provide great value for buyers. Continued strong sales of current crop could push the carry-out down to the range of mid 500’s to low 600’s, subject to the wild card of the ongoing logistics challenges. With many ship lines booked out 6 weeks, it’s advisable for buyers to consider covering any July needs sooner than later, to attempt to reserve vessel space. Stay tuned for potentially more significant news in July…
Paul Ewing Dennis Soares
June Position Report – Friday, July 9
Objective Forecast for 2021 Crop: Monday, July 12