As we head into May, we are coming off of a strong rainy season which has provided plenty of moisture for the California crops, including Almonds. You can see all the almonds on the trees throughout the state as the industry anticipates a good crop this year. Next week, on May 10th, the USDA will release the Subjective Estimate. This is a composite of interviews with growers by NASS comparing this crop to last year’s crop, which then calculates (with an amazing degree of accuracy) the crop size for this upcoming harvest. Right now, the industry has been working off a crop size estimate of 2.79 to 2.97 billion pounds. Both estimates were announced before the Land IQ estimate of 1.374 million acres of bearing almonds. This accounts for 70,728 acres of removals, but does not account for abandoned orchards or orchards that will not be harvested this year. The industry thinks the actual harvested acres will be closer to 1.36 million acres. Regardless of the two numbers, it is an observation that for the first time in almond history, plantings and acreage has peaked out and is now declining. 

With March shipments at 237 million pounds, down -15.7% from last year and still within industry expectations, shipments are on track to sell through this year’s crop and minimize the carry-out this year to a manageable 550 million pounds estimated. Crop receipts are also topping out currently at 2.437 billion pounds, lower than last year at this time by -4.07% - well off from last year’s 2.54 billion pounds and the estimated 2.6 billion pounds. While this is the third crop year of declining almond production in California, it does appear there will be a turnaround for the 2024 crop.

The industry has now shipped 1.838 billion pounds and stands ahead of last year’s shipments by +2.25% YTD.  While both domestic shipments and export shipments were down in March versus the previous year, YTD domestic shipments remain flat to last year and YTD export shipments are up 3.44% to a year ago. 

New sales for March were 181.67 million pounds, up 26.5% versus last year’s sales of 143.60 million pounds. Despite being the lowest sales month of the year, the industry managed to surpass last year’s sales. This can be attributed to the poor bloom weather we had last year, which pulled everyone off the market. With good bloom weather this year, some were more venturous in March to sell, and customers came back into the market as well to help prop up the market once again. Commitments stand at 575.5 million pounds, off 11% from last year. With a strong growing season firmly in place, April should help propel even more sales as pricing remains favorable in the buyer's favor. With a smaller crop this year, uncommitted inventory is also down with 774.5 million pounds, compared to last year’s 881 million pounds. This leaves less available inventory remaining for the rest of the current crop year. We are already seeing a tight market for high-quality NPX and NPS. Specific sizes and grades should be covered very soon for the remainder of this crop year.

Upcoming Industry Milestones:

• Subjective Estimate: May 10, 2024
• Position Report: May 14, 2024
• Objective Estimate: July 10, 2024

Bullish Trends:

• Shipments continue to be strong and remain ahead of last year by 2.25%, overall. Expectations for April shipments are above 220 million pounds, which would be stronger than last year’s shipments.
• The carry-out is on pace to be below 550 million pounds. This is much better than what we have seen in several years now. 
• The market remains committed to marketing almonds aggressively and is more willing now to sell further out than any time this season. 

Bearish Trends:

• With a forecast near 3 billion pounds, the industry needs to sell out this crop. Even with the smaller carry-out, the supply for next year will rise above this year if we hit a 3 billion pound crop. 
• We have seen a muddy market over the past few weeks with inconsistent pricing from one handler to the next - making it difficult to assess the quality of the remaining inventories.
• Uncertainty of commitments also makes it difficult to assess remaining demand for the rest of the crop year. The industry will need to pay close attention to the April Position Report.