The California Almond Industry continued to ship about what was expected at 199M lbs vs our estimate of 200M lbs but the worrying pattern of shipments trending below last year continued.\u00a0 Total shipments for the year remain at 16% behind last year \u2013 the same as January month end.\u00a0 One additional area of concern this month is the domestic market, which fell behind a bit for the month and sits at 3% behind last year to date.\u00a0 Till now the domestic market had been essentially flat vs last year and we anticipate this is primarily a timing issue vs a pullback of demand, though it would be helpful if retailers would follow our commodity price decline and pass the saving on to consumers to generate a bit of demand.<\/p>\n
Commitments caught up a bit vs last year and now trail by only 3% vs the 10% we were behind last month indicating a fairly robust selling period in February as the industry tried to play catch up with lower prices prior to the freeze.<\/p>\n
Receipts to date are now 2.89B lbs and it appears likely that this crop will go into the record books at 2.9B(billion) lbs +\/-.\u00a0\u00a0 Receipts for the month were about 65M(million) vs 63M in February last year and although there are some reports of a few huller shellers delaying processing, it seems unlikely we will hit 3B.<\/p>\n
A month ago we were starting the bloom and lots of clear, warm weather was in the forecast and the bees were flying with a fantastic bloom starting.\u00a0 Then, out of nowhere, we hit several days of very cold morning temperatures up and down the state with readings in some locations as low as 21 or 22 degrees Fahrenheit on Feb 23 and 24.\u00a0 As always seems to be the case when we get this type of condition, the stage of the bloom and the specific location of the orchard seemed to be the key factors on whether there was a lot of damage or a little.\u00a0 Many of the orchards and varieties in the North state in the coldest temp areas that were in the early nutlet stage had the most damage, while most of the orchards in our region of Kern and Tulare counties had much less damage despite the equally low temps.\u00a0 This was due to the early stage of the bloom in the southern valley, with all varieties still blooming or yet to bloom.\u00a0 The big picture is that yes, some farmers will have some severe losses in yield, but the majority of the crop will come out of the freeze with little loss of productivity.\u00a0 In our opinion, lack of adequate water supplies will have a far larger influence on the final 2022 crop than the freeze will have.<\/p>\n
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February Position Report<\/strong><\/h2>\nShipments:<\/u><\/strong>\u00a0\u00a0 Shipments for the month of February were off 15% from the prior year.\u00a0 This was widely anticipated and yet the actual fact is always more powerful than the anticipation.\u00a0 While this February was not as good as last year, it is important to remember that February 2021 was an all time record for the month and that this years volume of 199M was actually the 3rd<\/sup> highest February for shipments.\u00a0 So, not as negative as some would make out.\u00a0 It is also more than we\u2019ve shipped the last 2 months and it seems the export shipping situation may be improving slightly.<\/p>\nDomestic \u2013 February shipments were down 24% from last year and now down 3% for the ytd after being even till now.\u00a0 We view this as a matter of timing and expect the remainder of the years shipments to be very close to last year.\u00a0 We are hoping that inflation will not take too big a bite from consumers wallets and that retailers will pass on the lower priced almonds available at wholesale to the retail products sitting on the shelves in order to keep consumption growing.\u00a0 Almonds are still a huge bargain as a protein rich, good tasting, and sustainable food when compared to alternatives and we hope CPG brands and retailers continue to highlight this on the shelves.<\/p>\n
Export \u2013 February shipments were down by 11% from the previous year while YTD shipments were down 16%.\u00a0\u00a0 Japan, the EU, and India were bright spots for the month with shipments above last year and Japan ahead YTD as well.<\/p>\n
Sales\/Commitments:<\/u><\/strong>\u00a0 The industry left February at 67% sold of total supply vs 74% last year.\u00a0 Furthermore, we have 1.15B lbs left to sell this year vs 877M lbs left to sell at the same time last year \u2013 an increase of 31%.\u00a0 Given the lack of demand growth domestically, the export shipping issues, rampant inflation, and the ongoing war in the Ukraine, it is difficult to see where the increased consumption will come from.\u00a0\u00a0\u00a0 At this time, a carryout of 950M lbs looks more likely than 900M.\u00a0 \u00a0This would mean a carryout of 27% – much higher than anything we have seen in the last 10 years.<\/p>\n![\"\"](\"https:\/\/jssalmonds.com\/wp-content\/uploads\/2022\/04\/Picture1.gif\")
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Receipts\/Crop Size:<\/u><\/strong>\u00a0 Receipts remain about 6% behind last year and indicate a final crop size of right at 2.9B lbs +\/-.\u00a0 Despite some reports of huller shellers delaying processing, we view it as unlikely that the final crop gets to 3B.<\/p>\nMarket Impact:<\/u><\/strong>\u00a0 STD-5\u2019s have dropped .05 in the days after the report and other varieties and grades are also losing some ground with the exception of large Nonpareil which seems to be holding.\u00a0\u00a0 Offers from origin are becoming more plentiful as more call pool and relatively unsold handlers are realizing that despite the freeze, there are still a lot of almonds to sell into a more and more uncertain world economy.\u00a0 We expect large nonpareil to remain firm and most other varieties and sizes to remain lower as we move forward in March.<\/p>\n <\/p>\n
Markets by Geography<\/strong><\/h2>\n\n\n\nRegion<\/strong><\/td>\nYTD<\/strong><\/td>\nMonth<\/strong><\/td>\nComment<\/strong><\/td>\n<\/tr>\n\n<\/td>\n<\/tr>\n \nUSA<\/strong><\/td>\n\n-3%<\/span><\/p>\n<\/td>\n
\n+24%<\/span><\/p>\n<\/td>\n
After holding steady all year in spite of the export decline, domestic shipments finally dropped off a bit.\u00a0 We remain optimistic that this is merely timing and not a longer term demand slowdown.<\/td>\n<\/tr>\n \nW EURO<\/strong><\/td>\n\n-21%<\/span><\/p>\n<\/td>\n
\n+5%<\/span><\/p>\n<\/td>\n
A bright spot in the overall picture \u2013 it seems last years massive shipments and inventory are finally fully used up and the EU is in a resupply mode.\u00a0\u00a0 As long as prices remain low, and ships available, we expect this trend to continue for the next few months as the EU makes up ground.<\/td>\n<\/tr>\n \nIndia<\/strong><\/td>\n\n-18%<\/span><\/p>\n<\/td>\n
\n+2%<\/span><\/p>\n<\/td>\n
India continued to make up some ground lost earlier and shipped more this February than last year.\u00a0 Expect strong shipments to India to continue as Diwali demand must be satisfied from this year\u2019s crop.<\/td>\n<\/tr>\n \nChina<\/strong><\/td>\n\n-27%<\/span><\/p>\n<\/td>\n
\n-37%<\/span><\/p>\n<\/td>\n
A weak month of shipping continues this year\u2019s weak shipments.\u00a0\u00a0 According to CNN \u2013 \u201cCovid-19 cases continue to rise in China’s worst outbreak since Wuhan\u201d.\u00a0 This is impacting the economy, distribution, and consumption on top of overall economic growth weakness.<\/td>\n<\/tr>\n \nMideast<\/strong><\/td>\n\n-23%<\/span><\/p>\n<\/td>\n
\n-45%<\/span><\/p>\n<\/td>\n
UAE, Turkey, Saudi Arabia all down for the year and the month.<\/td>\n<\/tr>\n \nJapan<\/strong><\/td>\n\n+11%<\/span><\/p>\n<\/td>\n
\n+2%<\/span><\/p>\n<\/td>\n
Japan still a bright spot for the month and YTD.\u00a0\u00a0 According to the New York Times \u201cJapan\u2019s Economy Surged in the Brief Window Before Omicron\u201d\u00a0 But \u201cSpending drops 1.2% in January as omicron curbs hit consumers\u201d according to Bloomberg.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h1>\nGoing Forward Perspective<\/strong><\/h2>\nDespite the freeze that will be felt severely by some growers in some areas that helped prop up pricing briefly, the overall supply of almonds remains high vs demand and shipments fell further behind last year this month.\u00a0 Now that we can see the likelihood of a 950M lbs carryout, and the inflationary pressure + Russia in Ukraine adding to the uncertainty, we expect that low prices will continue for the foreseeable future for all varieties and sizes except large Nonpareil which should remain firm.<\/p>\n
With the current expectation that next years crop will be 2.75B lbs +\/- .1B \u2013 next year\u2019s supply should be about 950M + 2.75B = 3.7B lbs or ~ 6% more than this year.\u00a0\u00a0 With current pricing we know that some growers are not profitable given the rising cost of all inputs \u2013 especially fuel, fertilizer, and water.\u00a0\u00a0 Despite this, we have plenty of almonds and we know the invisible hand of Adam Smith and the pricing mechanism based on WW supply and Demand will ultimately prevail and rectify the situation.\u00a0 In the meantime, we continue to pray for rain and snow in the latter part of March and into April.<\/p>\n
In the end, we know that almonds are tasty, nutritious, and highly valued among all the cultures of the world and that the long-term prospects are bright for our amazing industry.<\/p>\n
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Current Water Situation:\u00a0 Significantly Worse than Last Year<\/strong><\/h2>\n![\"\"](\"https:\/\/jssalmonds.com\/wp-content\/uploads\/2022\/04\/Picture2.png\")
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Latest Almond and Water News:<\/strong><\/h2>\n>\u00a0 Port backlogs mean fewer almonds shipped from California: https:\/\/www.yourcentralvalley.com\/news\/local-news\/port-backlogs-mean-fewer-almonds-being-shipped-from-california\/<\/a><\/p>\n>\u00a0 Kern almonds may dodge brunt of frost damage: https:\/\/www.bakersfield.com\/news\/kern-almonds-may-dodge-brunt-of-frost-damage\/article_2549e30c-9fe6-11ec-99c0-af11288d59b5.html<\/a><\/p>\n>\u00a0 As California\u2019s drought intensifies, the pain spreads: https:\/\/capitolweekly.net\/as-californias-drought-intensifies-the-pain-spreads\/<\/a><\/p>\n
Domestic \u2013 February shipments were down 24% from last year and now down 3% for the ytd after being even till now.\u00a0 We view this as a matter of timing and expect the remainder of the years shipments to be very close to last year.\u00a0 We are hoping that inflation will not take too big a bite from consumers wallets and that retailers will pass on the lower priced almonds available at wholesale to the retail products sitting on the shelves in order to keep consumption growing.\u00a0 Almonds are still a huge bargain as a protein rich, good tasting, and sustainable food when compared to alternatives and we hope CPG brands and retailers continue to highlight this on the shelves.<\/p>\n
Export \u2013 February shipments were down by 11% from the previous year while YTD shipments were down 16%.\u00a0\u00a0 Japan, the EU, and India were bright spots for the month with shipments above last year and Japan ahead YTD as well.<\/p>\n
Sales\/Commitments:<\/u><\/strong>\u00a0 The industry left February at 67% sold of total supply vs 74% last year.\u00a0 Furthermore, we have 1.15B lbs left to sell this year vs 877M lbs left to sell at the same time last year \u2013 an increase of 31%.\u00a0 Given the lack of demand growth domestically, the export shipping issues, rampant inflation, and the ongoing war in the Ukraine, it is difficult to see where the increased consumption will come from.\u00a0\u00a0\u00a0 At this time, a carryout of 950M lbs looks more likely than 900M.\u00a0 \u00a0This would mean a carryout of 27% – much higher than anything we have seen in the last 10 years.<\/p>\n <\/p>\n Receipts\/Crop Size:<\/u><\/strong>\u00a0 Receipts remain about 6% behind last year and indicate a final crop size of right at 2.9B lbs +\/-.\u00a0 Despite some reports of huller shellers delaying processing, we view it as unlikely that the final crop gets to 3B.<\/p>\n Market Impact:<\/u><\/strong>\u00a0 STD-5\u2019s have dropped .05 in the days after the report and other varieties and grades are also losing some ground with the exception of large Nonpareil which seems to be holding.\u00a0\u00a0 Offers from origin are becoming more plentiful as more call pool and relatively unsold handlers are realizing that despite the freeze, there are still a lot of almonds to sell into a more and more uncertain world economy.\u00a0 We expect large nonpareil to remain firm and most other varieties and sizes to remain lower as we move forward in March.<\/p>\n <\/p>\n -3%<\/span><\/p>\n<\/td>\n +24%<\/span><\/p>\n<\/td>\n -21%<\/span><\/p>\n<\/td>\n +5%<\/span><\/p>\n<\/td>\n -18%<\/span><\/p>\n<\/td>\n +2%<\/span><\/p>\n<\/td>\n -27%<\/span><\/p>\n<\/td>\n -37%<\/span><\/p>\n<\/td>\n -23%<\/span><\/p>\n<\/td>\n -45%<\/span><\/p>\n<\/td>\n +11%<\/span><\/p>\n<\/td>\n +2%<\/span><\/p>\n<\/td>\n Despite the freeze that will be felt severely by some growers in some areas that helped prop up pricing briefly, the overall supply of almonds remains high vs demand and shipments fell further behind last year this month.\u00a0 Now that we can see the likelihood of a 950M lbs carryout, and the inflationary pressure + Russia in Ukraine adding to the uncertainty, we expect that low prices will continue for the foreseeable future for all varieties and sizes except large Nonpareil which should remain firm.<\/p>\n With the current expectation that next years crop will be 2.75B lbs +\/- .1B \u2013 next year\u2019s supply should be about 950M + 2.75B = 3.7B lbs or ~ 6% more than this year.\u00a0\u00a0 With current pricing we know that some growers are not profitable given the rising cost of all inputs \u2013 especially fuel, fertilizer, and water.\u00a0\u00a0 Despite this, we have plenty of almonds and we know the invisible hand of Adam Smith and the pricing mechanism based on WW supply and Demand will ultimately prevail and rectify the situation.\u00a0 In the meantime, we continue to pray for rain and snow in the latter part of March and into April.<\/p>\n In the end, we know that almonds are tasty, nutritious, and highly valued among all the cultures of the world and that the long-term prospects are bright for our amazing industry.<\/p>\n <\/p>\n <\/p>\n >\u00a0 Port backlogs mean fewer almonds shipped from California: https:\/\/www.yourcentralvalley.com\/news\/local-news\/port-backlogs-mean-fewer-almonds-being-shipped-from-california\/<\/a><\/p>\n >\u00a0 Kern almonds may dodge brunt of frost damage: https:\/\/www.bakersfield.com\/news\/kern-almonds-may-dodge-brunt-of-frost-damage\/article_2549e30c-9fe6-11ec-99c0-af11288d59b5.html<\/a><\/p>\n >\u00a0 As California\u2019s drought intensifies, the pain spreads: https:\/\/capitolweekly.net\/as-californias-drought-intensifies-the-pain-spreads\/<\/a><\/p>\n<\/p>\nMarkets by Geography<\/strong><\/h2>\n
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\n Region<\/strong><\/td>\n YTD<\/strong><\/td>\n Month<\/strong><\/td>\n Comment<\/strong><\/td>\n<\/tr>\n \n <\/td>\n<\/tr>\n \n USA<\/strong><\/td>\n \n \n After holding steady all year in spite of the export decline, domestic shipments finally dropped off a bit.\u00a0 We remain optimistic that this is merely timing and not a longer term demand slowdown.<\/td>\n<\/tr>\n \n W EURO<\/strong><\/td>\n \n \n A bright spot in the overall picture \u2013 it seems last years massive shipments and inventory are finally fully used up and the EU is in a resupply mode.\u00a0\u00a0 As long as prices remain low, and ships available, we expect this trend to continue for the next few months as the EU makes up ground.<\/td>\n<\/tr>\n \n India<\/strong><\/td>\n \n \n India continued to make up some ground lost earlier and shipped more this February than last year.\u00a0 Expect strong shipments to India to continue as Diwali demand must be satisfied from this year\u2019s crop.<\/td>\n<\/tr>\n \n China<\/strong><\/td>\n \n \n A weak month of shipping continues this year\u2019s weak shipments.\u00a0\u00a0 According to CNN \u2013 \u201cCovid-19 cases continue to rise in China’s worst outbreak since Wuhan\u201d.\u00a0 This is impacting the economy, distribution, and consumption on top of overall economic growth weakness.<\/td>\n<\/tr>\n \n Mideast<\/strong><\/td>\n \n \n UAE, Turkey, Saudi Arabia all down for the year and the month.<\/td>\n<\/tr>\n \n Japan<\/strong><\/td>\n \n \n Japan still a bright spot for the month and YTD.\u00a0\u00a0 According to the New York Times \u201cJapan\u2019s Economy Surged in the Brief Window Before Omicron\u201d\u00a0 But \u201cSpending drops 1.2% in January as omicron curbs hit consumers\u201d according to Bloomberg.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/h1>\n
Going Forward Perspective<\/strong><\/h2>\n
Current Water Situation:\u00a0 Significantly Worse than Last Year<\/strong><\/h2>\n
<\/p>\n <\/p>\nLatest Almond and Water News:<\/strong><\/h2>\n
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![\"\"](\"https:\/\/jssalmonds.com\/wp-content\/uploads\/2022\/04\/Picture7.jpg\")
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