April Shipment Numbers and 2020 California Almonds Subjective Report April 2020 California Almond Industry Position Report was published this morning. Here are some key points from the report: 2019 Crop Receipts to Date: 2534 Million LBS 2019 Total Shipments: 1863 Million LBS (+5.5%) March Total Shipments: 181 Million LBS (+2.4%) • Domestic Shipments: 77.70 Million LBS (+14.8%) •
Export Shipments: 103.5 Million LBS (-5.3%) Total Commitments: 499 Million LBS (15.14%) Net New Sales: 125 Million LBS 2019 Crop Percentage Sold: 94.4% 2020 Almond Subjective Estimate : 3 Billion Lbs Various Countries/Regions Month to Month Shipment Change India (-52%) China/HK/Vietnam (-32%) South Korea (-2%) Japan (+38%) Western Europe (+7.2%) Central & Eastern Europe (-1%) Middle East (-24%) The Shipment numbers for April were another record for the 5 th Month in a row. This is now 6 record shipment months out of the last 9 months of reports, staring Aug of 2019. We expect Robust Shipment for May, which seems like will be another record for this marketing year. The carryout is Still projected around 400 Million lbs which will be enough for the crop transitioning from 2019 to 2020 but still will be tight for certain grades and sizes.
Major Export markets like India , China, and Middle East all declined in shipments for the month which gives rise to question: Will we be heading for a stock squeeze in JuneAug in those markets? It will be very interesting to observe that in conjunction with declining Covid issues worldwide, major economies getting back to normal, and significantly lower prices, will it push demand higher? USDA came out with the California Subjective Estimate for 2020 at 3 Billion Lbs, with 1.26 Million acres at a yield of 2380 lbs per acre.
This production number is possible with the good chill hours, nice bloom and even nicer post bloom weather, there is no doubt that the crop looks very nice in the central and norther parts of the state! At the current prices for the new crop, growers are at best breaking even (state average yield). On the west side which relies on Federal water, this year it will be a disaster with 15% possibly 20% of allocation.
Buying water in that area of the state currently comes with a $900 per acre/foot price tag (with a 4 acre foot requirement for almonds – Yes, do the math on $3,000 acre cultural costs, not counting any debt service). We will see more growers reducing water usage which will certainly hurt the crop in on those acres for next year and pulling older orchards which are in major red ink at these prices.
We suspect even 3,000 per acre yield growers, in good water districts, are dangerously close to being under cost of production. The current mood for selling new crop (Specifically Industrial Grades), is why sell at a loss today when I don’t even know what I have. If I have to sell for a loss I’ll do it when the crop is in the barn. Everyone is still dealing with the COVID-19 pandemic – all of us here at Valley Pride Ag Co wish you and your family safety & health during these troubling times.
Valley Pride Ag Co Team