Treehouse Almond Market Update – April 11th, 2023

For the 3^rd consecutive month, California shippers managed to report another milestone number with March shipments totaling 281.1 million lbs, the largest shipments ever recorded for March. The 14.7% increase (36.1 million lbs) catches the industry a bit off guard and is a welcomed surprise to California Sellers. Year to date shipments are now 6.8% ahead of the 2021 crop season and in terms of total supply, California is sitting at 73.3% for percent sold & shipped up ~1% from this time last year.

Export shipments at 214.6 million lbs in March are up 24%  (214.6 vs 173.14 million lbs) from a year ago. Strength of export shipments while expected, are well above expectations as price sensitive markets (China, India, Middle East) continued to show positive growth.  Domestic of 66.44 million lbs were down 7.5% from the previous year.

Crop receipts for the month totaled 18 million lbs, bringing YTD receipts to 2.54 billion lbs vs 2.9 billion this time last year. Using an adjusted expected final crop size of 2.55 billion lbs, as a percent of total supply, California is now at 73% versus 72% a year ago.

The main callouts are once again mirroring previous reports; in markets where low prices are being transferred to consumers, we continue to see encouraging growth. In more mature markets (ie. Domestic & EU) dominated by consumer-packaged goods, price relief is not being transferred to consumers at the same rate and it may be fair to suggest that competing products are beginning to dampen almond market share.

1. Chinese March shipments totaled 24.74 million lbs, impressively up from 6.59 million lbs a year ago. Fueled by strong January sales and decent February activity. Question remains on future demand out of China as expectations are they will shift to duty free Australian supply. For the most part, Australian sellers have gone quiet along with CA sellers, will see if this continues over next few weeks.
2. India shipments of 27.5 million lbs vs 23.9 million lbs (up 15%) a year ago is encouraging considering recent NPIS pricing of $1.90 translates to kernel pricing over $2.70/lb. With CA inshell inventories dwindling, maintaining this pace will be difficult as India will likely start shifting focus to Australia crop.
3. Middle East maintained its impressive campaign with YTD shipments up 59%. UAE & Turkey accounted for 13.5 million lbs of the 17.311 million lb increase for the region. Although, all destinations performed once again and another positive sign that low prices are being reflected in the market.
4. North Africa continues to emerge as a major shipping destination for California Almonds. Total shipments for the month at 15.9 million lbs, increased by 10.57 million lbs (up 197%) is no small accomplishment. Morocco, once largely supplied from Spain, continues to shift their demand to direct California imports as improved duty rates have shown obvious benefits.
5. Domestic shipments for March were down 7.5% and are now down 5.8% for YTD. Additionally, sales for the month were down 10.7% compared to previous March and continue to draw concern that inflationary pressures are restricting price relief on shelves but also a growing concern that the problem domestically is larger than just inflation.

Season-to-date shipments are now 6.8% ahead of last year’s pace, impressive considering shipments were trailing nearly 2% in December.

While sales of 143 million lbs are on the lower end of normal and attributed to sellers vacating the market due to inclement bloom weather it is interesting to note that uncommitted inventory is also down 5.89% (55 million lbs) vs a year ago and reflective of the lower total supply for 2022 crop (3.47 billion vs 3.36 billion). The surprising shipments give sellers a bit more confidence over the next 3-4 weeks and likely give sellers more time to better understand crop potential before jumping back heavily into sales. Additionally, fears of a potential 800 million+ carryout are once again put on the backburner as the 3^rd consecutive month of impressive shipments gives hope that a sub 700 million lb carryout is achievable. However, shipments reflected from January sales are expecting a slowdown in April. If shipments are to remain close to the previous year, California will need to continue to add sales.

The onslaught of hail, rain, wind and even snow during peak bloom had even the most seasoned of industry experts doubting whether California would be able to set a crop. As the sun cleared and nuts have begun to develop, it is clear that California will in fact have a crop and in some areas growers are reporting positive development while others attest to lighter than previous year. Variable nut development across regions and varieties will make crop estimating more difficult than in years past and even with early estimates we anticipate crop speculation will continue into harvest. The next several weeks are critical, as the first crop estimates, nursery report and adjusted bearing acreage will set the tone for new crop sales.

Position Report – March 2023