Californian Almond, March 2023 Report

March Shipment

The almond industry is experiencing supply-side constrictions due to a decrease in inventory, with a computed inventory of 1.5 billion pounds which is behind last year’s figure by -13.58%. Committed shipments are also lagging behind last year’s figure by over -22%. The uncommitted inventory figure, however, remains below last year’s mark by -5.89%.

This implies that the industry has less to sell moving forward, with fewer orders on the books than it did a year ago. The current supply-side conversation has quickly changed from an oversupply scenario to one where supply tightening has rapidly developed and continues to constrict.

The total shipments for the current crop year have approached 1.8 billion pounds, which is +6.85% ahead of this time last year. Assuming that the industry continues its growth rate of +6.85%, total shipments for the year would project around 2.7 billion pounds, and the carryforward would dwindle to 500 million pounds. This growth rate may be overly optimistic, so if instead, the industry simply shipped what it did last year through the end of the crop year, the industry project roughly 575 million pounds as a carryforward. The current projection is closer to a 600-700 million pound carryforward, but it is still a loose forecast.

Global market

It is important to note that price stability generally occurs when the carryforward target is 20% of annual shipments. Too much below that, prices rise, and above that, prices fall. The rough math suggests that we are within reach of a stable 20% scenario where supply is in balance, at least for the current crop year. This does suggest that future crop expectations could have a profound influence on commodity prices as crop conditions become clearer should they swing significantly one way or another.

The weather has brought significant uncertainties to the market, particularly concerning the strength of the next crop. Handlers had completely left the market in mid-February and have only recently re-entered, having been so concerned with pollination viability. A clearer understanding of how severe the weather impacts will begin to materialize next month with the publication of the subjective forecast, but for now, significant concerns remain regarding future yields.

Export markets grew +24% over last March and are now ahead of last year at this time by +12.44%. China imported over 24 million pounds in March, surpassing last year by +275%. India imported 27.5 million pounds in March, up 15% YoY. Western Europe has slowed a bit in recent months from its strong growth-oriented pace of buying earlier in the year. However, the region is still ahead of last year at this time by +1%.