We are mid-way through January now, and it has been a dry one. December left us with a good snowpack in the Northern Sierras and even a decent amount of rain throughout the valley floor, but we have not seen anything since. The extended forecast is not much brighter. The further south we go, the dryer it gets, as seen in the Los Angeles region. It is a La Nina year, specifically cooler pacific ocean temperatures which push the Pacific Jet Stream up and over California. In fact, it acts like a barrier, keeping the storms away for the most part from the coastline up and down the state. We are enjoying crisp cold mornings, followed by sunshine and low 60 degree temperatures during the day. This has led to questions about the amount of chilling hours the almond trees are receiving, an important ingredient in allowing the trees to rest and prepare for bloom in February. With only a few weeks left to go before bloom, the number of chilling hours is sure to be down versus last year. Water allocations are also sure to be reduced for the growers due to the lack of rain and snow to replenish the reservoirs and aquafers throughout the state. It is not officially being called a drought yet, but it sure feels like one. 

The Almond Board released the December Position on January 9th. It really did make some noise this time, in regards to the steep fall off in crop receipts from the same time period of last year. December receipts were 233.63 million pounds, down an astonishing 35.3% from last year’s 360.95 million pounds. This is leading many to believe that that for the most part, we may be closer to done than not. As we speak 2.576 billion lbs. have been received. Hullers and shellers throughout the state worked to complete their operations before the Christmas break. Most expected this number to reach or exceed 2.6 billion pounds. While we will not speculate at this time, the opinion is it will be difficult to reach the 2.8 billion pound estimate at this point, and certainly a crop exceeding the estimate is all but off the table. 

So what does it matter? Well, it does in the sense that we had an 800 million pound carry-in last year versus this year’s 502 million pounds. Total supply last year was 3.348 billion pounds, which may very well be significantly less this year when total supply was forecasted to be 3.236 billion pounds based on a 2.8 billion pound crop. That differential may grow even further than thought leading to an even smaller carryout next year. We all recall the difficult transition we had this year. 

Where are we currently headed?

Total shipments for December were 233 million pounds meeting industry expectations. This keeps the industry on track to match last year’s shipments. If in fact we have less almonds to sell this year than last year, expect to see this start to fall as we will not be able to grow volume with less almonds. Domestic shipments were 56.05 million lbs., down 1.1% vs last year’s 56.68 million lbs. and pretty much flat to last year. Domestic shipments continue to be consistent and expected to remain so throughout the remainder of the crop year. Export shipments were also consistent with this train of thought as 177 million pounds shipped, up 2.5% versus a year ago 172.7 million pounds. Exports were led by Turkey, Japan and South Korea. Meanwhile, China continues to stumble with little chance to turn it around this crop year. While India is also off, expectations are still high that this will turn around in the months to come. 

Sales & Commitments: Total new sales for December were 182.5 million lbs., down vs. last year’s sales of 219.4 million lbs. Both domestic and export sales shared in the decline. While smaller than previous months, it was actually better than expected considering the difficulty in finding offers out there during the month and the shorter month due to holidays. Look to see new sales rebound this month. 

Commitments for the 2024 crop have slipped to 561 million lbs., which is down 12% vs the 637 million lbs. from last year. This is a function of lack of offers from growers cautiously continue to wait not offering out too far into the year as well as buyers also holding off purchasing hand to mouth with the strategy of capturing a buying opportunity should a weakening occur following the bloom. With the possible smaller crop than expected, all will turn their attention to the bloom weather and conditions of the trees going into the growing season. With less crop inputs continuing, less chilling hours for the trees this winter and possibly less water allocations looming, one would think the growers would not be interested in accepting offers below the current market levels.

Commitments for the 2024 crop year stand at 611.77 million lbs., which is down 5.5% vs the 647.42 million lbs. from last year. This is really a function of lack of offers as growers cautiously continue to wait not offering out too far into the year. However, total commitments remain near last year’s levels, we still do not expect commitments to rise out of this range in the near term due to CA’s unwillingness to sell anything out past the next 3 months. This commitment number could push lower next month due to a combo of slow sales during the holiday period and CA’s lack of interest for post bloom sales.  

Uncommitted 2024 crop inventory sits at 1.321 billion lbs., up 9.9% vs last year’s 1.202 billion lbs. As crop receipts fall off, so will uncommitted inventories in the months ahead.  

Upcoming Industry Milestones:

• Position Report:  February 12, 2025
• PTNPA Scottsdale AZ: January 17 - 20, 2025

Bullish Trends:

• The December shipments met industry expectations. Total shipments remain flat to last year.  If the crop is less than expected, then the industry may be too far sold. 
• Buyers continue to buy hand to mouth, which seems to be what both sellers and buyers want currently, until they don’t anymore.  At some point one way or another, realities will be realized. 
• The almond processors are happy with the current demand as production lines run to fill orders.  As one market weakens, another pops up to take up any slack, typical of the industry.  With most uncovered, demand should stay consistent through the remainder of the crop year.  

Bearish Trends:

• Deterring buyers from booking long spread business seems to have some processors regretting the move.  With great California weather thus far, bloom should go off without a hitch.  
• If the weather does hold, and crop receipts bounce back in January, a buying opportunity could present itself in March if not sooner. 
• The January position report along with the bloom should bring some closer to crop size and allow for the market to reset based on results from both.