May 2020 Almond Market Update

Despite the many challenges presented by the global lockdown to contain the spread of COVID 19, California handlers shipped a record 181 million lbs. in April, up 2.4% from the record shipments of 177 million lbs. in April a year ago. This represents the 5th consecutive month of record shipments by the Almond industry.

The USA domestic market continues to reflect strong shipments driven by the needs of manufacturers to replenish retail shelves and fill distribution pipelines after a frantic buying spree by consumers stocking up on food for the duration of the lockdown. Domestic shipments eclipsed last year’s deliveries by an astounding 14.8% setting a new record at 77.7 million pounds. Year to date the domestic market is up 6.39% over last year.

Reflecting on worldwide demand, shipments were constrained by individual countries lockdown policies. On the extreme side of the spectrum, India’s draconian lockdown of the ports and transportation network resulted in a drop of 7.1 million pounds or 52% for the month of April while Germany saw shipments increase 5.3 million pounds or 52%.

Regionally, Western Europe monthly shipments were up 6% for the month and sitting at an increase of 8% on a year to date basis.

The Asian regional shipments were down 20% for the month and the Asia is down 9% for the year. In addition to the COVID-19 disruptions, trade policy continues to plague the performance of this region.

After a fast start, the Middle East shipments were down 2.7 million pounds or 24% for the month of April, but are still 25% ahead of last year’s pace.

Accordingly Export shipments were down for the month of April 5.3% but remain strong up 5.1% for the year to date.

New sales in April started to slow registering 124.5 million pounds for the month of April, down from March’s 174.2 million pound and down 14% as compared to last year.

Committed and shipped as percentage of 2.540 billion lbs. crop (less 2%) reveals
the 2019 crop sits at 94.9% sold and shipped. For those that prefer the alternative calculation of committed and shipped percentage of crop plus carry over or the total available, the figure is 84.1% sold and or shipped.

Over the past month prices were on the defensive after the unofficial crop estimate by a prominent trader who has a track record of accurately estimating crops. The realization of a bumper crop, a result of a near perfect bloom, achieved instant credibility. Prices regain a solid footing midway through the month.

The real story on pricing has been the overall collapse of premiums paid on varieties and grades. Nonpareil which had garner a premium of 30 to 50 cents in years gone by has collapsed to levels closer to 10 cents. Meanwhile premiums for Carmel and Monterey have all but disappeared.

Standard 5% settled in at $2.00 per lb. and California and Carmel sits at $2.05 per pound. Nonpareil Supremes were recently seen between $3.15 to $3.25 per lbs. for the typical sizes but due to dwindling supplies of Nonpareil Extras, the market was covering at slightly higher levels. Blanched slice and slivered most recently traded between $2.70-$2.75 per lb.

Amid the chaos and uncertainty of the COVID-19 global pandemic, it is astounding that the almond industry was able set a new shipping record for the month of April. This speaks to the resiliency of the almond industry and demand for almonds. Clearly this bodes well for the continued growth of consumption as we begin to transition into a new era of abundant supply.

Abundant supply appears to be very likely, after today’s Subjective Estimate forecast the 2020 crop at 3.00 billion lbs, right in line with expectations already set by the earlier trader forecast of 2.96 billion lbs. Agree with it or not, the market will use this number at least until the Objective Estimate slated for July 7th, putting buyers in the driving seat as the industry contemplates selling an additional 450 million lbs of supply into a world recovering from COVID economic damage.

Brian Tormey
Sales and Marketing Director
Treehouse California Almonds, LLC