Senior Vice President
As the Almond Board fiscal year enters its final month, Year-To-Date shipments are 2,107 million lbs. Shipments exceed last year by 161 million lbs and 9%, having already eclipsed the final 2016 crop shipments of 2,100 million lbs with one month remaining.
New 2018 crop commitments for the month of June were 76 million lbs (similar to June new crop commitments in 2017). 2018 Year-To-Date new crop commitments are now 55% of last year, after being only 40% of prior year at the end of May.
The Objective Estimate at 2.45 billion lbs increases the 2018 supply outlook. In the short term, supply constraints are reflected in an ending inventory that will fall below 350 million lbs when the final loss and exempt % is calculated. With NASS projecting doubles 27% higher than last year, good quality SSR next year will be more limited than a 2.45 billion lb crop would typically yield.
Market focus is primarily on the tariff-induced trade issues, particularly in China. There is a wait and see attitude on new crop to see if Chinese demand will be adversely impacted.
Underlying consumer demand for almonds remains strong, in spite of the temporary interruptions in the global supply chain. The U.S. market has been the first to dip into new 2018 commitments as consumer products companies have begun covering future demand.
The California almond industry is facing historically tight supply as we transition crops.
The 2.45 billion lb Objective Estimate and the unresolved trade issues are impacting the outlook for new crop vs. current crop pricing.
Based on relatively thin market volume, there is wider than normal variation in pricing on similar products.
Expect more consistent market pricing trends to emerge as transaction volume increases in the next few weeks.