US Almond Supply and Demand Estimates: Overstocked 2022/23 Despite Remarkable Rebound in Exports

2021/22 Exports Finishing Strong

US almond exports soared in the second half of the 2021/22 marketing year, after logistic disruptions sabotaged exports throughout the first half. In a typical year, exports are already winding at this stage, however, exports this April was the highest for the marketing year, as well as a record for the month of April, at 183 million lbs. Based on export commitments, which stood at 464 million lbs at the end of April, there could be new records in May, June, and July for their respective months.

Given the large supply of almonds available and the upcoming harvest, commitment will likely drop steeply towards the end of the marketing year, as exporters make good on these commitments, and most buyers have already completed their procurement for 2021/22. Total exports for the marketing year are estimated at 1.85 billion lbs.

Domestic shipments were much less impacted by the logistic disruptions. Domestic shipments for 2021/22 are estimated at 780 million lbs. This is slightly less than the 808 million lbs sold domestically in 2020/21.

Another Large Crop on The Way

According to the USDA’s first estimate for the 2022 almond crop (2022/23 MY), production could be 2.8 billion bushels. This will be the third-largest crop on record, after the 3.0 billion lbs harvested in 2020, and the 2.9 billion lbs harvested last year. The area under nut-bearing almonds is the highest on record, at 1.37 million acres, but water restrictions and availability due to an ongoing drought will impact yields. Some farmers also reported frost damage during the flowering stage in early March. However, despite the lower yields, it is still a sizable crop, and given the large opening stocks, there will most likely be an oversupply for most of the season.

Uncertain Demand

Both the supply and consumption of almonds within the US have been booming over the long term. Covid-19 restrictions had a mostly positive effect on domestic nut consumption. Nuts are regarded as a healthy snack, and as consumers became more health-conscious during the pandemic, nut consumption increased. Nuts are also regarded as an “at-home” snack, and with households spending more time at home, it inflated consumption. As Covid-19 restrictions are lifted consumers will be spending less time at home, which could break the momentum in domestic nut consumption.

Another concern is the effect of inflation on demand. If Americans were eating the same food in April 2022, as a year ago, they will have paid around a tenth more, according to the USDA’s Consumer Price Index for Food, which shows a YoY increase of 9.4% at the end of April. The USDA estimates the CPI for Food to increase by 6.5% to 7.5% in 2022. Nuts are comparatively expensive in the snack market, and as households need to tighten their budgets, they might turn to cheaper snacks.

The other side of the coin is that almond prices have been stagnant, while the prices of most other foodstuffs increased. The categories that make up the CPI for Food have all increased by between 4-22%. Almonds or nuts are not reported separately, but the wholesale prices of almonds have barely moved over the last year.

Oversupply in 2022/23

The 2022/23 harvest will start in August, which means there are only two months left before the new crop comes in. According to Tridge Estimates, 2022/23 will start with large opening stocks of 928 million lbs. Exports in 2022/23 are expected to be higher than in 2021/22, but lower than in 2020/21, as households cut back on spending. Domestic sales are also expected to be higher than 2021/22, but with consumers spending more time outside, domestic sales could be lower than the peak of 2020/21. These estimates indicate that 2022/23 will again have an oversupply of almonds, and ending stocks could once more top 900 million lbs on July 31st, 2023.