Almond Market Update – February 2023
The Almond Board of California released the January 2023 position report
Shipments were a Record 229.7 million lbs. vs. 177.2 in 2022 – UP 29.6% for the month and bringing YTD to 2.6% UP
DEMAND
U.S. -0.1% (-7.3% YTD)
Exports +47.5% (+7.2% YTD)
Western Europe +65% (+10% YTD)
India +52% (-2% YTD)
Middle East / Africa +105% (+63% YTD)
China / Hong Kong/ Vietnam +64.3% (-20% YTD)
Japan -7% (-16% YTD)
South Korea -61% (-43% YTD)
Canada -4% (-12% YTD)
Central / Eastern Europe -9% (+14% YTD)
Latin America / Caribbean +152% (-4% YTD)
REVIEW
January Shipments – Industry members were more optimistic this month, but this was still on the high side of expectations for the 2nd month in a row.
January Sales were 350 million lbs. vs. 207 million lbs. in January 2022 – well above the strong expectations. The only time the industry sold more was 359 million lbs. in September 2016.
Committed (Unshipped) stood at 840 million lbs. – just below last year’s 841 million lbs. After a long-time, the industry is finally caught up on sales.
Sold / Shipped Combined was 2.11 billion lbs. – up 1.5% vs. a year ago.
The Industry Sold Position, using a crop of 2.55 Billion lbs., was 63.3% of total supply – up from 59.9% a year ago.
2022 CROP
January 2023 Receipts were 98.6 million lbs. vs. 170.8 million lbs. in January 2022. Crop receipts so far are tracking down 12.5% vs. last year. The shortage vs. last year should increase slightly as we do not anticipate another 95 million lbs. to come as we saw last year.
| 2022 Crop So Far vs. 1 YR AGO | |||
| Change | 2022 | 2021 | |
| Nonpareil | -12% | 967,612,948 | 1,093,809,118 |
| Monterey | -6% | 476,126,236 | 505,093,523 |
| Independence | +1% | 335,530,817 | 331,062,853 |
| Butte/Padre | -23% | 205,263,463 | 265,238,447 |
| Aldrich | -21% | 94,572,605 | 120,419,768 |
| Carmel | -23% | 87,776,980 | 113,907,495 |
| Wood Colony | -32% | 84,667,299 | 123,645,539 |
| Fritz | -15% | 76,252,719 | 90,096,421 |
| Shasta | +16% | 19,899,298 | 17,085,581 |
| Sonora | 1% | 19,247,561 | 19,035,789 |
2023 CROP
The 2023 crop is becoming an increasing part of the discussion. Here’s a look at some of the PROS & CONS we see for the 2023 Crop potential:
PROS
Trees rested from Frost – Orchards in parts of the state, particularly the Sacramento Valley & the Delta. This is significant and not really debated.
Water Availability – we think long-term regulations coming into play, combined with the salt build up that will take 1-2 years to work away, mean the additional water is only a minor boost for 2023 crop.
CONS
Orchard Removals – increased removals due to a variety of reasons including: water situation, tree age, and even poor yielders that may be young to middle age but cannot survive with these low prices.
The heat wave last summer could have hampered bud development.
Economics – the impact will be inconsistent from grower to grower, but overall, it seems to be an underestimated factor. For example, a prominent grower in Madera County noted that their bud set is adequate, but not spectacular. They went on to explain that they shorted it some on water because they did not have enough to go around and were on the low end of the fertilizer program, and the impact is starting to show. Throughout much of the state we have seen cutbacks in numerous areas such as post-harvest fertilizer applications, numbers of beehives ordered, etc. This is what makes the 2023 crop very different from a year like 2016 when we came out of that drought.
Buying Activity / Retail Pricing
China & India continued to actively buy, and likely make up a good amount of the massive sales month. China continues buying into February.
The U.S. Retail – some have kept pricing high while others are running promotions that should stimulate consumption growth. Below are some examples of local promotions. Some are very impressive consumer values like these roasted/salted almonds at $2.72/lb., but they are sitting right next to roasted flavored almonds selling for about double the price, one of many examples of significant inconsistency. During the pandemic period of supply chain issues and heavy inflation, many retailers held onto very high prices for some products like almonds that had declined in price considerably. As we are in this new phase of more cautious consumer spending, there appears to be more pressure to deliver value to consumers, and almonds are a product they can do that with.
European retail is perhaps a month or so behind the U.S. with promotions, but we saw the first signs recently with German based major European retailer Lidl running a significant promotion, and we heard of others beginning to as well.
Health Studies
The pandemic period slowed some research so for 2023 there are many more health studies anticipated to be released compared to last year.
Research Related Outreach (spreading the news about the findings from health research) is an area the Almond Board will be more active in the coming year. In initial test program last year, Facebook and Instagram ads such as the below were successful at creating engagement with consumers in several countries: France, Germany, India, Italy, Japan, Mexico, South Korea, the UK. and the US.
OUTLOOK
Buying & selling interest was huge during January. February shipments should be another record.
Despite a very bullish report today, the industry is aware of the need for continued strong sales and shipments to work away at the carry-out. For reference, our carry-out from the 2020 crop (August 1, 2021) was 608 million lbs. and our 2021 crop carry-out (August 1, 2022) was 837 million lbs. If we continue with strong sales and shipments, the industry has potential to get the carry-out back into the range of 600 million lbs.
Soon attention will turn to bloom, which appears to be a few days behind last year.
The latest health study is posted here: Almonds Promote Muscle Recovery
Best regards,
Paul Ewing Dennis Soares
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February Position Report – Thursday March 9, 2023