Organic Almond Market Update - December 2020

Organic Almond Pricing:

As harvest got underway in August, prices hit the lowest levels in about 10 years. This came at a time of very low conventional pricing, though it’s not an entirely direct correlation. Conventional is currently trading at roughly half the value of organic.

In recent months organic pricing moved about 0.30/lb. off the bottom, with more improvement in pollinator variety pricing than the higher end varieties.

2020 ORGANIC ALMOND SUPPLY

CALIFORNIA SUPPLY: While we do not have as good of statistics for organic as conventional, we have some indicative data. According to USDA incoming data, organic receipts in California increased from 13.6 million lbs. in 2018/2019 crop year to 17.8 million lbs. in 2019/2020 crop year. So far 21.7 million lbs. are received for the 2020/2021 crop year, and if last year is an indication, there would still be a few million lbs. left to come in. Increasing organic acreage is likely responsible for at least half of the California supply growth this season.

The growth in California supply over the past 2 seasons has led to lower pricing and decreased imports out of Spain/Italy.

EUROPEAN SUPPLY / IMPORTS: In the spring, Spain was expecting a much larger 2020 organic crop, but the wet spring brought some disease (fungus) problems and reduced some of the potential. European growers also resist the current low levels more than California growers, also leading to reduced imports.

DEMAND

During the March/April 2020 COVID shutdown period, there was a temporary increase in demand for many shelf stable items, including organic almonds (not to the extent of toilet paper). After this brief period, several sectors of consumption suffered. Nut bar sales declined as fewer people were traveling, going to the office, etc. Bulk bins in supermarkets were mostly closed down due to sanitation concerns. Meanwhile, consumption improved in key areas including dairy alternatives (i.e. almond yogurt, almond milk) and almond butter. Total consumption remained healthy and the carry-out from 2019 crop into 2020 crop seemed to be the lowest in many years. Reduced imports contributed to the good demand for California origin in the transition period.

OUTLOOK

The estimated 1/3 growth in California supply this season is largely coming from higher value varieties (primarily Nonpareil). Meanwhile demand is very strong for lower-end varieties, causing the market firming seen. There has been the most interest from Europe for California origin in many years, likely resulting from the very attractive prices in California. There were some issues with organic integrity for some European lots last season, which could have also contributed to the decreased imports to the U.S., and increased interest out of Europe for US Origin.

There seems to be a supply/demand balance for the California organic almond market. The organic industry’s growth should continue and likely reach 1% of total US supply in the coming years.

Organic Almond Update - October 2017

HARVEST UPDATE:  Most of harvest is complete in California.  There are still some Carmel Types and Fritz to come in.  It is now evident that the organic almond yields are well below last year and well below expectations.  As seen in the conventional industry, insect damage is also the highest seen in a very long time.  Unfortunately the crop news so far is all bad news for growers and buyers alike.  There is some additional acreage coming into production this year and one can hope that will alleviate some of the shortfall in yields.  

Consumption continues to grow with supply, creating an overall healthy market.

Organic Almond Update - August 2015

Organic almond prices are at record highs heading into the 2015 crop year...levels similar to where the '14 crop traded for the past 6 months. 

Carry-in appears to be quite low.

Harvest is underway, with most Nonpareils complete and pollinators not far behind.  It is the earliest harvest in recent history.  California production for 2015 appears off from last season.  Yields per acre are down for most.  For smaller acreage growers of organic almonds in particular, some have not been able to find the quantity or quality of water needed and the impact on production is enormous.  Some are expecting declines in production of 40% or more.  Below are pictures of some of these orchards.  The reason supply may remain somewhat stable is the increased bearing acreage as some acreage comes out of transition or comes into bearing age.

Spain is expecting another good crop overall, and particularly in organic where many growers have been getting certified.  Spanish shipments into North America should increase again due to the 20% discount below California's prices. 

Consumption of organic almonds in straight packs, bulk bins and butter, is off due to the high prices.  However, ingredient use in some segments remains strong.  New product development is slowing due to the record high prices.  Demand for organic at the major retailers in general is very good as consumer demand shifts more toward natural and organic foods.  This bodes well for potential growth when supply begins growing again in the future. 

With the mixed impact on consumption, and increased imports out of Spain, and uncertain California supply, the mid to long-term market outlook is uncertain.  The short-term market outlook appears to be quite firm.

Please contact us if you have any feedback or questions.

Paul Ewing

Almond Review April 2014

Today the Almond Board of California released the March 2014 position report.  

March shipments were 151.3 million lbs. vs. 140.6 million lbs. last season.

Up 7.6% Overall.  

Domestic shipments were up 9.2% 

Exports were up 6.6%

DEMAND:  

India, down 25% for the season, showed an impressive 35% increase for the month of March.  High almond prices and weak Indian rupee have hurt consumption this season.  China continued to ship at a slow pace, though inventory levels there seem low and much lower than at the same time last year.   Chinese importers do not see good opportunity to profit at current almond prices, so are buying other nuts in place of almonds, for now.

Western Europe's growth moderated as buyers became more cautious.  Central/Eastern Europe, was off 53% due to the sharp decline in Russia.  The political situation may continue to hamper Russian shipments in the coming months.  

THE 2013 CROP:

Receipts surpassed 2 billion lbs. with Nonpareil receipts at 806 million.

Uncommitted inventory is 536 million vs. 512 million lbs. a year ago.  It appears that a disproportionately high volume of the carry out will be Nonpareil.

THE 2014 CROP:

Industry expectations are for a crop similar to 2013, assuming the water impact is not too significant.  

The Nonpareil crop appears off.  The Nonpareil trees in many orchards went into bloom with a weaker bud set due to the heavy '13 crop.  You can see the lighter crop by the lack of clusters of nuts.  NP kernel sizing should be about 1-2 sizes larger.

Butte/Padre are inconsistent but good overall.  Other pollinators look excellent.  

Factors that could help contribute to more '14 tonnage include kernel sizing (at least for NP if not others) and additional 3rd and 4th leaf acreage.

OUTLOOK:

World-wide inventory is low to moderate depending on the region.  However, buyer confidence is also low, so most of the buying is for nearby shipment.  We anticipate a total carry-out similar to 2013 along with another early harvest.

At today's price levels, the expectation for 2 billion lbs. in California and an improved Mediterranean crop, appears slightly bearish for the market.  Thus, prices have moved down again recently.  Today's shipment numbers are positive for the market and may change the sentiment.  NASS estimates on either side of 2B could really change the direction of the market.  This year the Almond Board will be executing two new surveys in conjunction with the NASS estimates.  These should give us additional information on the water situation among different growers, and info on how much planting is taking place.  This information should be very valuable for our industry.

The NASS Subjective Estimate is due for release Thursday May 1

The April position report is due for release Monday May 9

Click here to download the March 2014 Position Report

For any questions or comments please call, or write to paul@voyagerfoods.com 

Almond Review March 2014

Today the Almond Board of California released the February 2014 position report.  

February shipments were 149 million lbs. vs. 160 million lbs. last season.

Down 6.7% Overall.  

Domestic shipments were up 26.1% 

Exports were off 18.8%

DEMAND:  

The U.S market is up an incredible 13.5% for the season.  The health message is driving this, as consumers are increasingly aware of the benefits of eating almonds. 

Exports are slightly off for the season.  Western Europe (up 26%) is helping make-up for China (off 31%) and India (off 29%).  

In the '04 crop year when prices nearly doubled by about 2.00/lb., shipments to China were off 27%.  India seemed to get through that season by buying early.  In the '05 crop year, when prices started off at record highs, Indian shipments were off 24% for the season.  This season is an example of how price elastic the emerging markets remain, especially when comparing to the US and the EU.  Russia is off 21% so far and was off 12% the '05 crop year. 

THE 2013 CROP:

Receipts reached 1.99 billion lbs. with Nonpareil receipts at 797 million.  This is the most Nonpareil in history.  We expect a bit more to trickle in.  

THE 2014 CROP:

For many orchards, the bloom conditions were excellent.  This is far too early to guesstimate the crop size but we will make some general comments.

The strongest overall crops look to be in Carmel, Monterey, Wood Colony, etc.  We say "overall" because there are some very strong Butte/Padre crops, but it really depended on the timing of an orchard's bloom.  Some orchards were in full bloom during the middle of the late February storms and those growers are concerned.  The Nonpareil were very strong in our center area in '13, went into bloom with a weak bud set and thus came out with what look to be mediocre and spotty crops.  On the west side and southern areas the Nonpareil crop is reported to be much better.  

While it feels like spring weather lately, we are not out of the clear yet regarding frost.  It is forecast to get down to the low 30's F in some areas in the middle of next week.

WATER:

There are more unknowns about water than in our industry's history.  Some growers in the driest areas are worried about their trees surviving, let alone producing a crop.  We hear reports of wait times of more than one year to put in new wells in the southwest part of the state.  This is a very serious issue involving politics and weather, both of which nobody can really predict.  What we do know is that the outcome of the various water struggles could sway this crop by several hundred million lbs. 

OUTLOOK:

Water concerns are keeping some sellers off the market for new crop.  It's trading at a discount to current crop with limited activity.  

For current crop, the market is soft and fairly quiet.  As we often see this time of year, following an apparently good bloom, there are some sellers that just want to move product and this pushed current crop STD5 down from the high 3.40's to the 3.30-3.35 range.  NPS 23/25 is reportedly in the 4.20 FAS range, just 5 cents off the highs, though pricing is sloppy. 

An industry-wide concern continues to be the drought's impact beyond the '14 crop year.  Even if we experience El Nino conditions (very wet) next winter, buds for the '15 crop will already be developed.  Additional bearing acreage and 3rd leaf acreage will help '14 production and even more in the future.

The next position report is due for release Thursday April 10.  

Thank you for your interest.  For any questions or comments please call or write to paul@voyagerfoods.com