California Almonds: July Shipments “Surprisingly High”

Almond orchard with ready-to-harvest nuts on the ground. Photo: Sara Savary, AgFax Media

Editor’s Note: The Almond Board of California released the July 2020 position report this week. Here are the high points from from a market commentary by RPAC, LLC.

Click here to view its full report.

Harvest is underway for some early blocks of Independence and Nonpareil. The early fields we are seeing from the west side are showing smaller sizes and yields off 15% or more from last year.

Kernel sizing and yields usually improve as harvest gets further along. We are also anticipating a much better crop versus last year from the center/east and north, so it’s too early to get too concerned about the crop.

July 2020 Position Port Review:

July Shipments were surprisingly high. This was the best shipping month (vs. LY) of the entire crop year.

July Sales of 2019 crop of 74 million lbs. were more than double last year’s 35. Low prices, larger inventory and motivated sellers all helped boost sales.

Committed (Unshipped) is 265 million lbs., up 61% from a year ago.

Uncommitted Inventory is 182 million lbs., up 17% from a year ago.

New crop sales of 695 million lbs. is nearly double last year’s 352 million lbs. (Bullish news).

Currencies have generally moved in seller’s favor recently with the EURO back up to to 1.17 to the USD.

After 7-plus months of bearish sentiment, today’s report may help lift the mood. Sellers have been very aggressive to reach a level of approximately 23% sold on new crop. Any firmness we see or don’t also depends on how long sellers continue to want to keep the pedal down (so hard).

For 2021’s Crop: Trees Likely To Rest

Looking back at when we hit bumper yields like 2008, 2011, 2013, the following year yields per acre fell by 18%, 9%, and 9% respectively. If 2020 really is 3 billion lbs. and 2380 lbs./acre, we could see a yield more like 2165 in 2021 crop, based of a 9% rest.

This along with more moderate acreage growth due to higher orchard removals could put a 2021 crop around 2.8 billion lbs. (potentially).

If 2019 turns out to be 2.9 billion as some in the industry expect, a 2021 crop decrease of 9% to 12% would give us a 2021 crop around the 2.55 – 2.65 range.

So long-term, these things tend to balance out. And the best cure for low prices is low prices.

COVID-19 brings a wild card, no doubt, but we still anticipate very impressive demand growth this season. The USDA’s initial purchase of $40 million of almonds for food nutrition assistance programs (such as food banks) gives hope of a potential larger buy later in the season, which presents another wild card.

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