Portion of the US almond crop sold the lowest in 6 years

Published 2021년 12월 15일

At the end of November, US almond shipments and commitments were 737,541 MT, compared to last year’s 921,699 MT. This means that until the end of November, only 47.7% of the crop has been committed or sold, compared to 57.1% last year and 54.3% the 5-year average. Uncommitted inventory at the end of November was a massive 566,083 MT, compared to 355,616 MT last November. The logistic bottlenecks, that have plagued California’s harbors, could explain the subdued exports to some extent. The raging drought over California is another factor, with almond owners preferring to hold large inventories in anticipation of a continuation of the drought.

ABC’s Position Reports and the USDA crop estimate

In this follow-up article to Tridge’s analysis, US Almond Crop Commitments Drop to Lowest in 5 Years, almond shipments and commitments are compared to historic data to paint a clear picture of the current market situation.

The Almond Board of California (ABC) publishes a monthly almond position report. These position reports contain data on

crop receipts,
domestic shipments,
export shipments,
domestic commitments and
export commitments

Subsequently, the uncommitted inventory is also available. Commitments refer to almonds that have already been sold, but have not yet been shipped. This gives a good indication of the demand for US almonds, as buyers can already purchase almonds, to be shipped at a later date.

While this data in itself is already an indicator of supply and demand, when shipments and commitments are expressed as a percentage of the crop, and compared to historic data, the picture becomes very clear.

For historic data, the shipments and commitments can be compared to total crop receipts for the year. For the 2021/22 season, it cannot, because the season is not over and the total crop receipts cannot be tallied. However, shipments and commitments can be compared to the crop estimate, under the assumption that the crop estimate is accurate.

When comparing crop receipts to the end of November to historic data, it shows the crop estimate is most likely spot on. The most recent crop estimate by the USDA pegs the almond crop at 1.27 million MT (2.8 billion lbs). The Almond Board of California’s (ABC) position report shows that crop receipts from August 1st (when the harvest started) to the end of November is 1.05 million MT. This is 82.6% of the crop estimate. Compared to historic data, this is close to the 5-year average of 85.1%.

Source: USDA, ABC

Domestic Shipments and Commitments

Domestic sales and commitments will not worry traders too much. Domestic sales will most likely continue on their path with more and more almonds consumed each year. Domestic sales have increased every year over the last five years at an average of 7% per year. This means sales should top 453,000 MT (1 billion lbs) this year if the trend continues. However domestic shipments were slow out of the blocks.

At the end of November, 118,332 MT were shipped domestically. This is slightly lower than last year’s 122,908 MT, but higher than all other previous years.

By the end of November, domestic shipments and commitments were 272,155 MT, 10% lower than last year’s 301,185 MT. This year's crop is 7% lower than last year’s record crop and prices are higher for various reasons, which explains the slightly lower domestic demand.

Source: ABC

Export Shipments and Commitments

Export shipments have been following the same trend as domestic shipments and each year has been slightly higher than the previous year. Export shipments in 2020 soared, following a record crop of more than 3 billion lbs (1.36 million MT), and this year's export shipments until the end of November are far lower than last year.

At the end of November, 277,598 MT have been shipped as exports, compared to 342,915 MT last year and 278,959 MT the 5-year average. This will be worrying, since the crop is much higher than the 5 year average of 1.09 million MT.

Source: ABC

Total Shipments and Commitments

When total shipments and commitments are expressed as a percentage of the crop, it becomes clear that supply is outstripping demand.

Total shipments (domestic and export) until the end of November were 395,986 MT, or only 25.6% of the crop, compared to the 5-year average of 30.3%.

Total commitments were 341,555 MT, or only 22.1% of the crop, compared to the 5-year average of 23.9%.

Source: USDA, ABC

In total only 47.7% of the crop has been committed and sold, compared to the 5 year average of 54.3%. According to the ABC’s position report, there were 566,990 MT (1.25 billion lbs) of almonds left as uncommitted inventory at the end of November, by far the highest on records and nearly double last November’s 355,616 MT (784 million lbs ). This means unless demand picks up the pace, carry over into the next marketing year will be huge.

Logistic bottlenecks, and drought in California

Logistic bottlenecks have disrupted global trade most of the year and the main export season of almonds was definitely hampered by these logistic problems. This explains, to some extent, the slower export shipments of almonds. Even the slow commitments of exports were influenced by these disruptions, as traders were cautious to buy and sell in the face of high shipping costs and inevitable delays. Another contributing factor is the continued drought in California. This has prompted the owners of these almonds to hold on to their stock under the assumption that prices will find support. If the drought continues, next year’s almond crop will be unfavorably impacted. Prices have been moving sideways, caught between the ongoing drought and sales slowly plodding along. Should California receive rain, prices will come under a lot of pressure given the potential massive carry-over inventory. Should the drought persist, traders will be happy to keep their silos full.