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Hamburg, May 13, 2021

Almond Market Update, May 2021

Two significant data points were published this week for the California almond industry; the April Position Report and the NASS Subjective Estimate for the 2021 Crop.

The Position Report confirmed that April was the sixth time this year that California shipped 250 million lbs or more after first reaching that number last year one time. With shipments of 249.9 million lbs (technically just under 250) in April, YTD shipments are 365 million lbs and 20% ahead of last year. Regional shipments were a near copy of March with significant gains in China, India, Europe and the Middle East/Africa. While the U.S. did not duplicate last April’s COVID-19 induced spike, more than 70 million lbs were shipped for the third consecutive month. Adjusting out the COVID spike from last year, baseline growth in the U.S. would be closer to 5-7%.

New commitments were 163 million, trending above previous years and giving indication that demand continues into the last quarter of the crop year.

Receipts are still hovering around 3.1 billion lbs with little activity in April. With the ongoing unprecedented shipment levels, the outlook for ending inventory trends below 700 million lbs. Nonpareil 27/30 AOL has been growing shorter for 60-90 days, so the ending inventory will consist primarily of pollinizers and some Nonpareil 30/32.

Adding to the excitement, NASS released their 2021 Subjective Estimate at a very surprising 3.2 billion lbs. NASS is counting on 1,330,000 bearing acres and a yield that nearly replicates the record just set at 2,410 lbs/acre. This would be the third highest yield in the history of the California almond industry. With 2020 crop production in the North and Central state up 150% and 140 % respectively last year, they will not repeat. Production in the South state would need to exceed last year by more than 10% to reach 3.2 billion lbs. With a short water supply, Blue Diamond expects a crop that will not exceed 3.0 billion lbs and could end up short of that pending summer growing conditions.

Demand for 2020 crop has exceeded expectations, with shipments tracking to 2.8 billion lbs. 2019 crop shipments were less than 2.4 billion pounds. Ending inventory will dip below 700 million pounds.

With the NASS Subjective Estimate at 3.2 billion lbs, there will be considerable market confusion. This will likely delay some new crop activity as buyers and growers reach a temporary impasse over pricing. The outlook in the growing community is generally below 3 billion lbs for the 2021 crop with significant concern for surface water after two dry years. The impact on the final harvest numbers for 2021 are concerning.

The NASS Objective Estimate will be published on July 12.

Total supply looks to be modestly more than last year, and until there is clear outlook for better precipitation in the winter, the 2021 crop becomes a two-year play. Without snow in the Sierras next Winter, late season pricing would increase. In addition, Nonpareil demand has been larger than supply pushing pricing up late and setting different expectations going into the 2021 crop. There is likely to be a bigger gap between Nonpareil pricing and other varieties next year reflecting tighter supply vs. demand.

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