As August temperatures accelerated the almond crop's development, the harvest is now in full swing. However, early indicators from the orchards suggest that this year's yield may not be as robust as previously anticipated. The size of the almonds appears smaller than last year, likely impacted by the intense August heat, which may have reduced overall weight. Although it's still early in the harvest, these factors are shaping the industry's outlook for the coming year.

Early Harvest Insights: Smaller Yields and Sizes

The initial stages of the almond harvest are revealing a crop that may be less abundant than last year's. The intense heat in August has possibly taken a toll on the crop, leading to smaller sizes and potentially lower yields. This early data has the industry cautiously adjusting expectations as the full scope of the harvest becomes clearer.

Shipment Report Highlights: A Tight Carry-Out for 2024

The latest shipment report, released three weeks ago, indicated total crop receipts of 2.446 billion pounds for the last season, a decrease of nearly 5% from the previous year's production of 2.571 billion pounds. Despite this reduction, the industry managed to ship 2.692 billion pounds, a 5% increase over the previous year, thanks to a carry-out of 800 million pounds.

Looking ahead, this year’s carry-out is projected to be around 451 million pounds, the smallest since 2020. While this represents an ideal carry-out level, the quality of the remaining material is less than optimal. This situation is expected to make sourcing additional products for shipment over the next month challenging, as most available inventory is already committed.

New Crop Outlook: Adjusted Expectations for 2024/2025

As the industry shifts its focus to the 2024/2025 crop, the Objective Estimate has been set at 2.8 billion pounds. Earlier forecasts had predicted a larger crop, ranging from 2.9 to 3.1 billion pounds. However, given the current conditions, the industry is cautiously marketing the new crop as a 2.8 billion-pound yield until more definitive data becomes available.

Notably, the industry is off to a strong start with over 379 million pounds of the new crop already sold, an 85% increase from the 205 million pounds sold at the same time last year. This early momentum suggests strong market confidence, despite the potential challenges ahead.

Market Trends: Firm Prices with Potential Shifts in the Fourth Quarter

Over the past six weeks, the almond market has shown significant firmness, driven by strong shipments and a smaller carry-out. Although current prices are higher than they have been in some time, almonds continue to represent good value compared to other tree nuts. This firmness is expected to persist through the fourth quarter of 2024.

However, the market could shift depending on how the remainder of the crop turns out. If shipments do not meet expectations or if the crop yield exceeds current estimates, buying opportunities may arise later in the year. Conversely, if shipments remain strong and the crop aligns with or falls short of the estimate, prices could rise further, especially as the February bloom approaches.

Bullish and Bearish Trends: What to Watch

Bullish Trends:

• Early new crop sales and commitments have bolstered grower confidence, leading to continued firmness in the market.
• The industry achieved the second-highest shipments in history, with 2.692 billion pounds shipped, providing momentum going into the new crop year.
• The current crop is nearly sold out, and a carry-out of less than 451 million pounds could lead to a very tight transition.

Bearish Trends:

• Higher pricing levels have slowed transaction activity, with many buyers opting to wait on the sidelines.
• With limited supply left to bridge the gap before the new crop, August and September shipments may be weaker, potentially putting the industry behind in the new crop year.
• Export shipments are facing delays due to equipment shortages, which could exacerbate supply chain challenges in the weeks ahead.

Navigating a Dynamic Market

The almond industry is entering the 2024/2025 season with both opportunities and challenges. While early sales are strong, the smaller-than-expected crop and tight carry-out are creating a firm market. However, the potential for market shifts later in the year means that stakeholders will need to stay vigilant and responsive to changing conditions.

The almond market is in a delicate balance right now. With the early harvest showing signs of a smaller crop and tight supplies, we are seeing firmness in prices. However, the market could shift quickly depending on how the rest of the season unfolds. It's crucial for everyone involved to keep a close eye on these developments and be prepared to act as the situation evolves.