California Almond Market: Analyzing Temperature Shifts, Crop Estimates, and Industry Trends in Week 17
The Golden State experienced its initial surge of summertime warmth this week, as temperatures soared into the 90s. However, this hot spell is anticipated to last only a few days, with cooler-than-average temperatures and rain predicted for next week.
A crop estimate of 2.66 billion pounds, based on 1.36 million bearing acres, was reported by an industry analyst last week. Contrarily, another firm projected 2.29 billion pounds, derived from 1,650 pounds per acre and 1.39 million bearing acres. LAND IQ, in collaboration with the Almond Board of California, recently announced 1.366 million acres of bearing land, while the USDA estimated 1.38 million bearing acres. Each organization employed its own methodology to calculate these figures. Utilizing a crop yield of 1,650 pounds per acre, the total output would be slightly below 2.3 billion pounds, irrespective of the accurate bearing acreage count. To find a crop of this magnitude, one must look back five years, and even further—back to 2005—to discover a yield this modest.
March saw a record-breaking 281 million pounds of almond shipments, marking the third consecutive month of record-setting exports. Due to increasing concerns about the trees' crop, several sellers have opted to hold off. The majority will likely wait until the subjective estimate is released on May 12th. A more comprehensive understanding of crop and kernel sizes might be necessary before sellers commit to new crop sales. If the crop's decline is as substantial as it appears, retaining current inventory may become more beneficial as prices continue to strengthen.
Year-to-date shipments now stand at 1.798 billion pounds, a 6.85% increase compared to the same period last year. This, combined with a 2.541 billion pounds of crop receipts to date (a decrease of 12.4% compared to last year), suggests supply and demand for almonds are becoming more balanced.
Although the market has shown signs of activity, limited trading has occurred due to growers' current sentiment. As more information is collected and buyers grasp the situation's gravity, transactions should pick up.
Important Industry Dates:
Growing Period: The first irrigation of the crop year occurred this week during the heatwave. Cooler weather is expected next week.
Position Report: May 11, 2023
Subjective Estimate: May 12, 2023
Position Report: June 9, 2023
In week 17, almond market insights indicate both positive and negative trends. On the positive side, surpassing shipment levels from last year suggests that if the upcoming harvest is smaller, higher prices can be expected for the remaining crop. Additionally, the overall supply this year is lower than the previous year, and if this trend persists, demand might exceed supply. Recent acreage reports also support the notion of bearing acreage stabilizing. However, negative indicators include the possibility that record shipments over the past three months may lead to a decline in April and potentially May due to slowed sales recently. Furthermore, the rapid increase in prices without significant trading could be premature, and uncertainty remains regarding future domestic demand.
