Almond Market Update – November 2021
The Almond Board of California released the October 2021 position report
Shipments were 217.1 million lbs. vs. 309.7 m. in 2020 – DOWN 29.9% for the month (-14.6% YTD)
U.S. -11.6% (-3.6% YTD)
Exports -35.6% (-18.6% YTD)
Western Europe -48% (-23% YTD)
India -31% (-17% YTD)
Middle East / Africa -35% (-26% YTD)
China / Hong Kong/ Vietnam -22% (-6% YTD)
Japan +4% (+19% YTD)
South Korea -7% (+15% YTD)
Canada -20% (+1% YTD)
Central / Eastern Europe -62% (-44%)
Latin America / Caribbean -55% (-47% YTD)
The 2021 Crop
Crop receipts from USDA Inspections are 1.894B vs. 1.844 a year ago. These totals are not very insightful regarding final volumes as the crop is getting hulled quicker than last year. The variety make-up of receipts provides insight with Independence at 229M lbs. vs. 170M a year ago. NP receipts were 789M vs. 884M a year ago. Shasta variety albeit still a minor variety, surpassed Sonora in volume for the first year.
Insect Damage shows 1.91%, up from 1.35% a year ago.
October Shipments – forecasts went from bad to worse as global logistics challenges remain severe. Though the worst shipment news in a very long time, this was in-line with expectations.
October Sales were 244 million lbs. vs. 250 million lbs. in October 2020 This was a decent sales month.
Committed (Unshipped) stood at 748 million lbs. – down 28% from the 1.033 billion lbs. a year ago
Sold / Shipped Combined was 1.4 Billion lbs. – down 22% from the 1.8 billion a year ago
The Industry Sold Position on 2021 Crop was 42% of total supply – down from 51% sold a year ago.
Shipments were down significantly for October for a multitude of reasons. Larger Carry-In Stocks in warehouses of buyers globally has created a lighter pull to start the season. The “down market” gave buyers less incentive to participate and encourages postponing purchases. The logistics issues was the biggest factor in our opinion.
Many buyers have been gradually participating.
Growers have generally been patient sellers. Much of the selling support has come from seasonal pools as handlers either continued to average into the market and/or were faced with storage challenges and needed to sell.
California remains in a Drought despite a major storm in late October.
Inflation is a challenge for everyone these days. Buyers are facing rising costs of ocean freight, trucking, packaging materials etc. Growers are seeing dramatic increases in cost for fertilizer, chemicals, water (for many growers) and more. Handlers are seeing rising costs for freight, wood bins, packaging materials etc. Everyone is experiencing rising costs in labor, fuel, parts and more.
Lowering almond prices further would not help spur demand as much as stable prices would, as stability would give buyers confidence. At current prices we can see plenty of demand growth, especially if we can work through the logistics issues. These prices are not sustainable for growers for long and we expect another winter of a large volume of orchard removals, helping bring balance to supply and demand. As our Director of Grower Relations, Ernie Reichmuth, says, “the Almond Ship always rights itself.”
Paul Ewing Dennis Soares
November Position Report – Tuesday, December 14