After a cool spring with temperatures averaging 13 degrees cooler than normal, the state is about to experience its first summer heat wave. Temperatures in the Central Valley of CA are expected to average 106 degrees throughout the growing region. While late, summer is on! Irrigation will be in full force in anticipation of this week’s extreme weather. These temperatures are expected to last throughout the extended ten-day forecast with little relief during that time. 

With strong shipments this year paired with a short crop, we have seen the projected carry-out of the current crop continue to shrink. Expectations are that it may very well fall below 450 million pounds. This has resulted in the market continuing to move up in price and offers increasingly difficult to find. This is especially true for the most popular grades and sizes. The USDA/NASS subjective estimate of 3.00 billion pounds (an increase of over 21% greater than last year’s projected production of 2.45 billion pounds) predicts that we have a larger crop coming, yet it is still three to five months away, depending on the early varieties versus the late pollinator varieties. This will make for a very tight transition. We recommend anyone currently not covered for Q3 to do so now. We will do our best to assist you.

With April shipments of 241.48 million pounds up 22.4% from last year, shipments continue to be stronger than anticipated putting pressure on this year’s crop and minimizing the carry-out. Furthermore, crop receipts have also topped out. May is projected to be +220 million pounds shipped for the month pushing the needle up further. With limited inventory, June and July may slip a little but should still exceed last year’s shipments, overall. 

The industry has now shipped 2.08 billion pounds and stands ahead of last year’s shipments +4.24% YTD. Shipments should finish ahead of last year and likely up 100 million pounds than the previous year. 

Upcoming Industry Milestones:

• Position Report: June 11, 2024
• Objective Estimate: July 10, 2024

Bullish Trends:

• With a tight market, the quality grades continue to inch up with offers hard to find. This will continue as we have now started to see fewer new crop offers made and have also started to catch up to current market levels.
• Stronger sales have led to a smaller carry-out, the transition from current crop to new crop will be increasingly difficult from the August through October period and customers may need to plan further ahead than usual.
• The market remains strong and commitments are in line with supply. While pricing has crept up, it is still a great value over other tree nuts and will remain in demand in all sectors of food. 

Bearish Trends:

• While the current crop may be tight, the forecasted 3 billion pounds combined with the carry-out of around 450 million pounds, this brings total supply above compared to a year ago. This will keep the market in check as we are already seeing new crop offers below the current market.
• With a lack of supply at this point, shipments could fall off in July. This will lead to growers needing early sales to make up for deficits.
• With the objective estimate a month away, those able to wait before booking new crop may benefit the most, should the estimate rise above current expectations. The current projected bearing acreage exceeds that of the crop in 2018 when 3.1 billion pounds were harvested. We have had a very wet winter and water availability is higher than years past.