Almond Market Update – January 2024
The Almond Board of California released the December 2023 position report:
Shipments were 229.4 million lbs. vs. 206.3 million lbs. in 2022: +11.2% for the Month (+9.9% YTD)
REGIONAL DEMAND FIGURES:
U.S. +8% (+0.5% YTD)
Exports +12.2% (+13.6% YTD)
Western Europe +7% (+12% YTD)
India +16% (+28% YTD)
Middle East / Africa -8% (+10% YTD)
China / Hong Kong/ Vietnam +391% (+21% YTD)
Japan +26% (+16% YTD)
South Korea +10% (+25% YTD)
Central / Eastern Europe -38% (-27% YTD)
Canada +35% (+7% YTD)
Latin America / Caribbean -9% (+7% YTD)
SALES & SHIPMENT REVIEW
December Shipments – The figure is in-line with industry expectations.
December Sales were 219 million lbs. vs. 235 million lbs. in December 2022. The industry was well sold heading into December, and this was a solid sales month. Expectations were mixed.
Committed (Unshipped) stood at 637 million lbs. vs. last year’s 720 million lbs., down 11.4%
Sold / Shipped Combined was 1.78 billion lbs. vs. 1.76 billion lbs. a year ago.
The Industry Sold Position was 57% of total supply – vs 53% a year ago. This is assuming a 2.4 billion lb. crop with 4% Loss & Exempt (with the much higher inedibles).
Market Outlook & Supply/Demand Data
Buying activity remained very strong in recent weeks. China surprised us, as they often do, with very strong shipments. Historically they have been a wild card that really helped the industry in times of heavy supply, by coming in and buying up large volumes. India continues to impress and should be a major contributor to growth this season.
Vessel Delays with exports continue along with the challenges in the Red Sea and Panama Canal.
Carry-in forecasts with Supply/Demand Scenarios:
| 2020 CROP | 2021 CROP | 2022 CROP | 2023 CROP – Scenario A | 2023 CROP Scenario B | 2023 CROP – Scenario C | |
|---|---|---|---|---|---|---|
| Shipments stay up ~10% | Shipments Flat vs. LY Jan-July | Shipments down 10% Jan-July | ||||
| CARRY-IN | 450,122,464 | 608,137,394 | 836,808,032 | 800,292,337 | 800,292,337 | 800,292,337 |
| CROP | 3,106,951,935 | 2,922,001,402 | 2,571,123,853 | 2,400,000,000 | 2,400,000,000 | 2,400,000,000 |
| Loss & Exempt | 50,810,646 | 59,384,594 | 43,026,898 | 96,000,000 | 96,000,000 | 96,000,000 |
| Marketable Crop | 3,056,141,289 | 2,862,616,808 | 2,528,096,955 | 2,304,000,000 | 2,304,000,000 | 2,304,000,000 |
| Total Supply | 3,506,263,753 | 3,470,754,202 | 3,364,904,987 | 3,104,292,337 | 3,104,292,337 | 3,104,292,337 |
| Shipments | 2,898,126,359 | 2,633,946,170 | 2,564,612,650 | 2,815,944,690 | 2,667,425,777 | 2,515,158,545 |
| Carry-Out | 608,137,394 | 836,808,032 | 800,292,337 | 288,347,647 | 436,866,560 | 589,133,792 |
A crop in the range of 2.4 billion lbs. seems likely given receipts YTD of 2.26 Billion lbs. and most huller/shellers wrapped up. With 4.16% Inedibles so far, the larger loss & exempt seems very likely too.
While a 288 million lb. carry-out is not expected by anyone (including us), that is what the math shows if shipments continued up this much, and the above scenarios paint the picture that the carry-out is likely to come down considerably compared to recent years. Whether it is 400 million lbs. range or over 500+ million lbs. range, what is clear, this is likely going to be the tightest transition we’ve seen in several years (since before pricing became so low). With ongoing shipment issues, some buyers will take the prudent step and load up on this crop to secure stocks for the fall of 2024. What may exacerbate this situation is that certain varieties and qualities will become much tighter than others, especially with the quality of the’23 crop, this upcoming challenge seems to be underestimated by many and not factored into the current market. With prices historically low, securing supply of items that could be tighter later would seem judicious.
Much of the attention will shift to bloom next month. Chill Hours, which give the trees rest, are sufficient, but lower than some recent years. At the Denair station for example, Chill hours through yesterday totaled 542 hours, down 26% from last year’s 731 hours, similar to 2021 hours, and down 28% from 2020. Many orchards have a good bud set after two light crops, making a positive factor that many are talking about. The low inputs in recent years will not only impact crop potential for 2024 but also will impact the potential for 2025 crop. Bloom weather remains crucial as we’ve learned the past two years.
While the industry is likely over 60% sold by today, the season pools are considered to be more sold than the call pool. More impact on the sales and pricing is now in the hands of the call pool growers. Almond packers are further restricted in sales by the challenges in knowing what grades they can produce, given the unusual sizing and challenging quality this season.
The short-term outlook for the market remains bullish.
Best wishes,
Paul Ewing Dennis Soares
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January Position Report – Friday February 9, 2024