Bill Morecraft
Senior Vice President
California almond industry shipments for January were reported at a disappointing 194.5 million lbs. Global ocean freight capacity and scheduling issues impeded fulfilling demand in export markets. At the same time, U.S. shipments returned to a more sustainable YTD trajectory of a 5.9% increase.
Through the first six months of the crop year, overall shipments are up 16% and 206 million lbs. of the YTD growth, the U.S. contributed 22 million lbs, China added 50 million lbs, India added 90 million lbs, and Europe grew by 30 million lbs.
With significant export volume awaiting containers and vessel rescheduling, new commitments of 206 million lbs in January added to the already large backlog. Open commitments are now 932 million lbs, up 333 million lbs and 55% over the prior year. U.S. commitments are 21% ahead of last January. Export commitments are 90% ahead of last year, reflecting strong demand butting up against significant shipment constraints.
Receipts crested 3 billion lbs, as expected. Over the remainder of the season, they will creep closer to 3.1 billion lbs. The California industry is ~69% shipped and committed against the 2020 supply.
Last year the industry shipped 1.1 billion lbs from February through July. With nearly 2.0 billion lbs in computed inventory at the end of January, continued industry growth of above 10% would get carry-out inventory into the 700 million.
As the 2021 crop bloom begins, expectations are for a smaller crop next year closer to 2.8 billion lbs. The North and Central regions are not expected to repeat their record yields. With a smaller 2021 crop, supply and demand appears more balanced over the next eighteen months. Early bloom weather initially looks relatively moderate across much of the state.
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Market Perspective Prices began a slow fade of $.10-$.15 in late January and early February. It remains to be seen if the January Position report represents an inflection point in demand, or a temporary interruption in 2020’s strong global growth story. January proved to be the most difficult month for global ocean freight issues this crop year and is reflected in the export shipments. This disruption is expected to continue into February. The industry remains well booked into future months with buyers taking advantage of attractively priced almonds over the first 6 months of the 2020 crop year. With the large commitments on the books, shipments should remain strong in future months. With the crop nearing 3.1 Billion lbs, California will look to reduce inventory levels to a manageable carry-in and that will require additional 2020 crop sales and shipments through July. A smaller crop is expected next year, closer to 2.8 billion lbs, supply and demand is more balanced over the next eighteen months than it may be into this summer. |
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