{"id":1850,"date":"2022-05-26T13:46:36","date_gmt":"2022-05-26T13:46:36","guid":{"rendered":"https:\/\/jssalmonds.com\/?p=1850"},"modified":"2023-02-13T17:07:33","modified_gmt":"2023-02-13T17:07:33","slug":"jss-almond-market-update-may-2022","status":"publish","type":"post","link":"https:\/\/jssalmonds.com\/jss-almond-market-update-may-2022\/","title":{"rendered":"JSS Almond Market Update – May 2022"},"content":{"rendered":"

JSS Almond Market Update<\/p>\n

May 24, 2022<\/p>\n

Summary<\/strong><\/h2>\n

Lots of positive data has been coming in from various sources over the last few weeks that has helped to solidify and homogenize the expectations for the remainder of this crop and the new crop to come at the end of summer.\u00a0 Good shipments, sales, and crop forecasts in agreement have all helped to stabilize the market and gives everyone involved the same baseline when thinking about supply and demand moving forward.\u00a0\u00a0 Buyer and Seller confidence is most important in this market, and we have significantly more confidence across the industry than we had a month ago.<\/p>\n

The 4 important pieces of data to review this month are: 1- The almond acreage report came in from the USDA and Land iQ .\u00a0\u00a0 2- The subjective estimate came in from the USDA.\u00a0\u00a0 3- external crop forecasts from Wonderful and Bountiful.\u00a0 4- The April position report came in with strong shipping and sales numbers.<\/p>\n

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Acreage and Crop Estimates<\/strong><\/h2>\n

The final Almond Acreage report for the 2021 crop came in from USDA at 1.320 M acres.\u00a0\u00a0 This was slightly lower than anticipated, likely due to additional pullouts and leads to a yield per acre for the 2021 crop at 2.905B LBS\/1.32M Acres = 2,201 lbs\/acre \u2013 slightly better than anticipated.<\/p>\n

The Land iQ report which estimates the 2022 crop bearing acres also came out on the same day and forecast a total of 1.338M acres with 60k acres having been removed over the last year.\u00a0\u00a0 Fresno, Kern, and Merced were the top three counties with acres removed.\u00a0 We can now use with some degree of confidence the acreage number of 1.338 M acres as the base for crop forecasts.<\/p>\n

The subjective estimate was released by NASS with an estimate of 2.8B lbs which lines up quite well with \u00a0\u00a0\u00a0\u00a0\u00a0the Bountiful mid point estimate of 2.9B and the Wonderful estimate of 2.8B based on 1.34M bearing acres and a yield of 2,090 lbs per acre. \u00a0\u00a0This 2.8B lb number will be what the entire industry will work with for the 2022 crop until the objective estimate on July 8th.<\/p>\n

In summary then, the industry is agreement on the bearing acres of 1.34M and an estimate of 2.8B lbs \u2013 this takes into account the reduced yield from the ongoing drought and the freeze which impacted the Northern part of the growing region quite severely and will likely reduce the nonpareil portion of the crop to below 2021.\u00a0 This is a similar scenario to that which occurred in 2012 \u2013 2015 during which we also experienced growing acres, but lower yields due to drought conditions, and an overall crop that was essentially flat during this period.\u00a0 The primary difference this year is that groundwater is in shorter supply and no new well permits are being issued.\u00a0 This important and unprecedented factor should not be overlooked when planning your almond buying program for your 2022\/2023 needs.<\/p>\n

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April Position Report<\/strong><\/h2>\n

Shipments:<\/u><\/strong>\u00a0\u00a0 Shipments for the month of April were very good and above expectations at 245M lbs.\u00a0 This is off just 2% from the 250M lbs. shipped in the same month last year.\u00a0 Further, we expect industry shipments for the rest of the crop year to be above last year and we are beginning to see the very real possibility of ending inventory below 800M lbs!\u00a0 This realization has led to a slight firming in the market for 2022 crop as no one is worried anymore about a 1B lb. carryout.<\/p>\n

Domestic \u2013 April shipments were down 11% from last year and now down 4% YTD.\u00a0\u00a0 There are many possible reasons for this slow down domestically, but no one is completely sure if it is due to inflationary pressures on the consumers, a post covid reduction in at home snacking, or something else entirely \u2013 perhaps the bar market is still lagging?\u00a0 \u00a0At any rate we know that candy and overall snacking is still strong based on the retail reports and we expect the year will end strongly.<\/p>\n

Export \u2013 April shipments were up 3% led by strong demand in India as Diwali shipments must come out of the current crop, Turkey which doubled the amount taken the same month last year, and the UAE up about 50% from last year.<\/p>\n

Although YTD Domestic shipments are off 4% and Export is 17% behind last year, we expect very strong shipments the last three months of the crop year will bring the yearly shipment total very close to the record set in the 2021 crop.\u00a0 Quite an accomplishment considering the shipping issues, worldwide inflation, ongoing Covid lockdowns, and the conflict in Ukraine \u2013 all of which have impacted demand and shipping negatively.<\/p>\n

Sales\/Commitments:<\/u><\/strong>\u00a0 Sales for the month of April were robust and we are now 78% sold vs 85% sold last year at this same time.\u00a0\u00a0 Due to the great sales and shipments we\u2019ve been achieving, we expect the carryout will be much closer to 800M lbs. than 900 and we are hopeful the year end figure will be less than 800M.<\/p>\n

Receipts\/Crop Size:<\/u><\/strong>\u00a0 The receiving is 99.9% done and this years crop is set at 2.905B lbs.<\/p>\n

Market Impact:<\/u><\/strong>\u00a0 STD-5\u2019s in the current market are trading around the $1.75 level while new crop is at a .05\/lb. premium at about 1.80.\/lb.\u00a0\u00a0 Only in Nonpareil do we see the inverse with current crop NPIS at 1.90 and new crop bid at $1.70 with the same sort of spread on NP kernels.\u00a0 We expect this is a short term weakness in nonpareil due to the timing of Diwali this year and longer term we believe the nonpareil market will firm.\u00a0 Other items like SSR 27\/30 AOS and std-5\u2019s are still readily obtainable and will make up most of the carryout volume.<\/p>\n

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Going Forward Perspective<\/strong><\/h2>\n

Now that we have the acreage and several crop forecasts within the same range, buyers and sellers are beginning to get on the same page and more and more business is being done.\u00a0 The wildcard that remains is the drought and what the ultimate impact will be on the crop now on the trees.\u00a0\u00a0 One crop characteristic that we know the drought will impact is kernel size.\u00a0 Will Nonpareil be larger than last year due to the freeze taking off some of the kernels?\u00a0 Or will the sizes remain small due the drought and the possibility of a hotter than average summer.\u00a0 Only time will tell.<\/p>\n

We know without a doubt that the cure for low prices is less supply, and that has begun to happen with this coming crop smaller than the last, and the 2021 crop smaller than the 2020 crop. Eventually prices will come back as supply growth slows and demand continues to grow, albeit slowly.<\/p>\n

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JSS Happenings<\/strong><\/h2>\n