Almond Update
Today the Almond Board of California reported:
June 2010 shipments were 97.7 million lbs.
- Down 17% from June 2009 shipments of 118 million
- Domestic shipments were up 6% and exports were down 28%
Pricing dropped after the May position report was released a month ago. The market quickly bottomed out and then prices increased 5-10% in late June as pent up demand returned to the market, mainly from Europe. The NASS report yesterday has again caused prices to decline and the levels are not clear yet.
SHIPMENTS/DEMAND:
Today’s report brings shipments for the season to 1.35 billion vs. 1.26 billion at this time last season, up 
7%. Domestic shipments are up 10% for the season and continue to show steady growth. We think a lot of coverage is needed in many export markets as purchasing decisions have been put off and inventory has been worked down.
THE 2009 CROP:
Crop receipts as of June remained around 1.405 billion lbs
NASS’s 2010 objective crop estimate was released yesterday at 1.65 billion lbs., up 8% from the subjective forecast of 1.53 billion and up 17% from the 2009 crop. Average yield estimated at 2230 lbs./acre, the second highest ever. The estimate surprised us and we think it surprised many in the industry. The big shocker was the forecast for Nonpareil production increase of 18%. The unusually cool growing conditions throughout the spring have helped develop large
kernels. Per the NASS report, kernels are expected to be the largest we’ve seen since 2005, for all major varieties and growing regions. You can click here if you would like to read the actual NASS Objective Report.
We think two things could have contributed to a perception of the crop much lower than the 1.65 and hence the big surprise:
- Good growth on the trees provided more leaf and other cover for the nuts than usual.
- Kernel sizes much larger than expected
OUTLOOK:
We are not anticipating strong July shipments either, and we are expecting a carry out in the range of 330 million lbs., after Almond Board adjustments for loss & exempt. Currently we estimate total 2010 crop year supply in the range of 1.9 to 1.95 billion lbs., an increase of about 7 to 10% over 2009 crop year supply. These numbers assume the NASS estimate is correct.
One of the positive factors for demand right now includes the low prices of almonds, especially compared to other treenuts. Our industry has a history of impressive demand growth whenever we have bumper crops, as we saw with the 130 million lbs. of growth in the ‘08 crop year and the 195 million lbs. of growth in ‘07. Low inventory levels going into the new crop year should also give a good boost to shipments for the first part of the new crop year.
Certain varieties, sizes, and qualities may be in short supply for the transition period into the new crop. If the new crop comes in 7 to 10 days late as currently predicted, it increases the likelihood of a squeeze for some items.
Despite some bullish factors, we think the surprise of the 1.65 billion lb. estimate outweighs them for the time being.
The next position report is due August 11.
For more information please contact Paul Ewing
