Almond Market Update – March 2022
The Almond Board of California released the February 2022 position report
Shipments were 199.2 million lbs. vs. 234.2 m. in 2021 – DOWN 15% for the month (-16% YTD)
U.S. -24% (-3.4% YTD)
Exports -11% (-21% YTD)
Western Europe -3% (-21% YTD)
India +2% (-18% YTD)
Middle East / Africa -41% (-28% YTD)
China / Hong Kong/ Vietnam -29% (-27% YTD)
Japan +2% (+11% YTD)
South Korea -41% (-6% YTD)
Canada +2% (+5%)
Central / Eastern Europe -22% (-31%)
Latin America / Caribbean +32% (-33% YTD)
The 2021 Crop
January 2022 receipts brought the crop near 2.9 Billion lbs. In the last 5 months of the prior crop year only an additional 20 million lbs. were received.
The 2022 Crop
We cannot estimate the crop at this very early stage, but here are some things we have noted so far:
Prolific Bloom with high flower count per tree
Long Bloom in Central/Southern Regions – it started fast and has been extended by the cold weather in late February
Good Variety Overlap for Pollination
Tree demographics – we have a lot of young orchards entering more prime producing years
Bees – activity seemed good and there were no major reports of shortages etc.
Drought conditions in recent years have weakened some trees. This is likely to further impact the crop in the coming months as some growers face challenges including lack of water quantity and/or quality as well as salt build up in their soil. Unlike the 2015 drought, the North State is effected significantly as well. This drought also comes at a time of low almond prices and high input costs, which will likely lead to more impact on supply (removed acreage, less water applied etc.).
The Frost event was significant, perhaps the biggest most industry members have seen. It’s being compared to 2018; although many of the areas affected this year were further along with bloom and the duration of the cold temperatures was longer this time. In the Sacramento Valley, which now represents roughly 15% of the crop, it seems common to find roughly 50% of the flowers or nutlets were damaged by the frost. Low to moderate damage is seen in the center state all the way down to Tulare County, with young orchards more effected. Impacted areas don’t just include the east side; with damage seen in Dos Palos, Firebaugh, Huron, San Joaquin, etc. The impact is highly erratic. There are varying opinions on how much the tree can compensate for freeze damage by setting a higher percentage of the remaining flowers. David Doll’s’ Almond Doctor article from April 30 2018 noted an interesting perspective on this topic: “Damaged flowers and nuts will drop from the tree as the crop begins to set. This may take several weeks and may not be evident until the nuts begin to increase in size. Many will most likely fall off with this upcoming rain storm. It is a common misconception that the tree will compensate for crop loss with an increase in set percentage of the surviving flowers. This is not exactly true. There is some mild compensation due to a slightly higher set percentage of undamaged buds (~2% or so increase) as well as a gain from increased kernel size due to more energy directed to the embryo during the period of cell division. These two factors, however, are not enough to compensate for flower loss that may have occurred during bloom. Although many often hope, it is unlikely that the late blooming flowers will set as they often lack the energy within localized tissues to form a viable nut. ”
Low Prices – growers are looking for ways to cut costs amidst current conditions (rising farming costs and low almond prices) and this will have some effect on yields, just not clear how much.
February Shipments – continued shipping delays made for another weak month of exports. The US market went from it’s best month in January to it’s worst month in February.
February Sales were 215 million lbs. vs. 189 million lbs. in February 2021.
Committed (Unshipped) stood at 857 million lbs. – down 3% from the 887 million lbs. a year ago.
Sold / Shipped Combined was 2.3 Billion lbs. – down 12% from the 2.6 billion a year ago
The Industry Sold Position on 2021 Crop was 66% of total supply – down from 74% sold a year ago.
Buying interest was fairly good throughout the month. Seller participation seemed to be there leading up to the frost events of February 24-26.
Shipments once again seem in the range of expectations but on the low end.
The US Dollar has strengthened again. Currently at 1.09 to the Euro.
Supply Chain Pressures have not worsened but remain challenging. Export buyers can benefit by planning ahead and being flexible regarding shipping lines etc.
2022 Crop Outlook – looking back at the development so far, we find more pros than cons, but we think the cons significantly outweigh the pros. The freeze and drought are both a big deal in their own right.
Almond pricing remains very low amidst carryout concerns – despite big uncertainty about the 2022 crop potential, the carryout concerns remain and have kept current crop pricing down. Current price levels provide great value to buyers and make this another tough season for growers. The improved sales in recent months point to buyers seeing value in these lower prices and potentially improved shipments in the back part of the season.
Paul Ewing Dennis Soares
March Position Report – Tuesday April 12, 2022