Almond Market Report

Pre-Bloom weather in California has been a mixed bag with numerous rainy days, yet they have not been impactful. Rainfall and snowpack are below average for this time of year, but an "atmospheric river" next week may bring significant changes. However, warm storms could pose a problem in the Sierras, potentially causing flooding in the foothills and the Central Valley's floor. A close eye will be kept on the weather as we inch towards the almond bloom.

December saw crop receipts bolster the industry’s inventory with 361 million pounds received. Current receipts stand at 2.23 billion pounds, down 6.2% from last year, but expectations suggest a crop size likely surpassing 2.4 billion pounds - which is short of the 2.6 billion pounds forecasted.

Shipments have remained strong through the fourth quarter and are predicted in January to continue on trend with industry expectations of 230 million pounds. While not setting any records, it has put the industry in a position of strength with 1,145 billion pounds shipped to date and almost 10% ahead of last year at this time. With a shorter crop and strong shipments, expectations are for a much lower carry-out this year compared to what we have seen in four years. This should put us in a more comfortable range of 550 million pounds. Great strides in getting supply to match demand. 

To recap the "December Position Report", domestic shipments were 56.68 million pounds, up 8% versus last year’s 52.47 million pounds. This positive number for the domestic market brings total shipments flat to last year (+0.52%). Export shipments were 172.72 million pounds, which is 12.2% up versus last year’s 153.88 million pounds. Export shipments have improved month over month for the fourth straight month and represent the second-strongest December in history. We can see China/HK/Vietnam with a sizable increase, up 391% FTM and 21% YTD, in anticipation of "Chinese New Year" on February 10th. All key destinations stayed ahead YTD and total exports are up 13.59% YTD. 

Sales & Commitments: Total sales for the month were 219.42 million pounds, down 7% versus last year’s sales of 234.91 million pounds. Lower sales in December may be attributed to recent increased bullishness of sellers, and a lack of willingness to offer out for further periods. 

Commitments for the new crop year stand at 637.43 million pounds, down 11% versus the 719.71 million pounds from last year, which will be in line if the crop is lower than last year’s crop size. Uncommitted inventory currently sits at 1.20 billion pounds, down 14.4% versus last year’s 1.40 billion pounds. This number continues to move upward due to the late harvest, delaying receipts by ~1 month. 

Despite the lack of offers, the 219 million pounds of new business may be more in line with what the 2023/24 crop year supply will be. While new crop offers remain available for close-by shipments for the first quarter and second quarter, sellers have yet to open up to selling too much further out waiting to see what bloom weather will be like. In the meantime, plenty of winter sanitation is taking place as we prepare for the bloom which is just two weeks away now. 

Upcoming Industry Milestones

• Position Report: February 9, 2024

Bullish Trends:

• Strong shipments in the fourth quarter have put the industry ahead of last year by almost 10%. January shipments are estimated to be equal to or stronger than last year’s shipments in January as well. 
• With crop yields down three consecutive years, this has led to pricing pressure as demand is now more in line with the current supply.  
• Overall shipments are ahead of last year as rebounding demand remains strong and consumption continues to trend positively, supporting a firming market for the foreseeable future.

Bearish Trends:

• The industry has taken its foot off the pedal with weaker sales in December, which may slow down shipments in February and beyond. Last February and March were record shipments, which will make it hard to keep up with.  
• Sizing options this season remain a problem for the industry. Offers for anything 27/30 or below are hard, if not impossible to find at the moment. This could lead to demand destruction as many manufacturers have created their product lines and manufacturing lines around specific sizes with no option for larger sizes. 
• Shipping issues due to the unrest in the Middle East have escalated and are not only causing delays in transit times, but rising costs have continued. This has also spread to increased energy costs as winter is in full swing.