September Almond Report

Friday, September 22, 2017

September Almond Report

Well, things have certainly changed since my last report where I was wondering where the buyers went. The position report released last month showed a few interesting things, but one stood out more than any other. Shipments were close to that of last year, which was interesting since it had to come mostly from the 2016 crop. Receipts were well below last year due to the delayed crop - which everyone expected - but what really stood out and surprised people were the committed sales.

Here’s why it’s relevant:

  • Total of 677M lbs. committed as of the end of August
  • An increase of +168M lbs. shipped in August
  • TOTAL SALES = 845M lbs.
  • Total Supply = 2.25B lbs., less than 2% loss and exempt = 2.205B lbs. (2% might not be enough this year)
  • Add the 400M lbs of carry-in to give us a total supply of 2.60B lbs.
  • We have sold 845M lbs. of total supply of 2.60B lbs, which is 32.5% sold. Leaving us with basically the entire year to sell the 2/3 of the remaining crop.

As a buyer, I would be slightly alarmed by these numbers if I was not well covered. Many have entered the market at the same time as demand coming from every market segment. India, China, Mid-East, Domestic and Europe are all buying, however, I believe the United States and European Union - our largest and most stable markets - to be the most covered and the reason we are as far sold as we are.

As far as the crop is concerned, we continue to hear about higher than normal levels of serious damage. Many of the hardest hit growers tell me it was impossible to winter shake and destroy mummies due to the non-stop rainfall we received this year. Aside from the serious damage, we're seeing beautiful crops with nice color, and very low chip and scratch. Sizing on Nonpareil is approximately one size smaller than last year with fewer 20/22 and 22/24 and more 27/30 and 30/32. This is good news for our friends in Japan. With the increased in serious damage this year, we may see a higher than normal premium for high quality product such as J-spec due to the lack of availability.

We are selling into this rising market, limited somewhat by the speed of harvest, hulling and sizing. Recent Nonpareil sales to Japan and other high end markets are returning $3.00 to the grower. Inshell is even higher, between $3.05 - $3.10 back to the ranch.