Senior Vice President
On Friday, the ABC Position Report was released revealing YTD receipts of 2.385 billion lbs. for the 2019 almond Crop. The final 2019 crop, including anticipated receipts through March, would appear to be close to 2.5 billion lbs.
Industry shipments for December were up 3.2%, leaving the YTD increase at 4.3%. U.S. shipments rebounded in December to a 7.7% increase. YTD U.S. shipments remain just under last year at 1.77% lower than prior year. China bound shipments show the one large regional decline from last year, down nearly 53 million lbs. YTD. Overall shipments remain ahead of the prior year on the strength of growth in the EU and the Middle East. Growth in the UAE is partially a reflection of traded business moving more directly to Dubai. Turkey’s increase of 130% reflects less early trade uncertainty than existed last year. Shipments to India remain even with last year’s pace, up by 1% YTD.
Commitments remain ahead of last year overall. The U.S. remains 22% ahead of the last year, up by 58 million lbs. Export commitments have declined slightly vs. the prior year as forward positions shrink modestly.
With the Nonpareil crop increasing to nearly 1.050 billion lbs., up by 160 million lbs. or 18% over last year, most of the 2019 Crop growth is in the Nonpareil variety. Since trade issues the last two years have primarily impacted Nonpareil demand, the supply is growing faster than the demand in the short term. Exactly the opposite is happening in pollenizers, where demand is outstripping supply. Consequently, Nonpareil will be substituted for pollenizers as the year goes on, evidenced by the narrowing of traditional price differentials. The bumper Nonpareil crop this year in the south state will temper overall expectations for Nonpareil in the 2020 crop.
Despite differing outlooks for Nonpareil vs. pollenizers (particularly small pollenizers), the overall 2019 California almond crop supply is relatively balanced with reasonable demand projections.
Ending inventory projects to be between 375-425 million lbs., resulting in a still tight transition between crops. There will be differing outlooks on whether prices soften on the news of 2.5 billion lbs., but underlying demand suggests there will be shortages in several categories as we move through the second half of the year.
The next significant benchmark will be the February to early March bloom period, which will begin to define expectations for the 2020 almond crop and resulting supply.