Almond prices tipped to rise after US predictions of smaller crop

The US Department of Agriculture has estimated California’s almond crop will be down 11 per cent on last year. It comes as a relief for Australian growers.

Australian almond producers are breathing a sigh of relief after the US revealed it was predicting a smaller almond crop this year.

The development is forecast to push up global prices that have been trending below average after consecutive years of huge crops coming out of California – the world’s biggest almond producer – of between 2.5 billion pounds (1.13 billion kilograms) and 3 billion pounds (1.36 billion kilograms).

While global demand for the nut is strong, shipping constraints have stymied US almond producers from getting their almonds to customers, leaving many to hoard record levels of stock.

Almond Board of Australia chief executive Tim Jackson said news of the US’s smaller 2022 harvest of about 2.6 billion pounds (1.16 billion kilograms), according to the U.S. Department of Agriculture’s objective forecast released this month, would provide some stability for the industry.

“Normally the US sells what it can grow, but it has been really difficult (to do that) because of sea freight congestion, which has fed into this buyer sentiment that there’s plenty of almonds around so I don’t have to run out and buy now, I’ll pick my prices,” Mr Jackson said.

“That’s really suppressed pricing. This 2.6 billion pounds (1.16 billion kilograms) will take the pressure off and provide flexibility around the record-sized carry-over (unsold nuts) going into their new season.”

The USDA has predicted the 2022 almond crop to be 11 per cent lower than last year’s crop of 2.92 billion pounds (1.34 billion kilograms), and a yield of 1900 pounds (862 kilograms) per bearing acre, the lowest since 2009.

The smaller crop has been put down to warm temperatures in February, shortening the almond bloom, then frost later that month in some parts of the state, and ongoing drought.

Signs that shipping constraints were easing began appearing in May, with reports of record shipments that month and again in June, up 17.4 per cent and 26.3 per cent respectively on the same time last year.

The Stratamarkets Almond Index jumped 8 US cents last week following the USDA’s crop forecast to USD$2.16/lb (A$3.16/0.45 kilograms), its biggest weekly gain since last November.

“Prices reacted quickly to the forecast, with bids increasing 5-10 (US) cents two hours after the USDA released its estimate. Sellers raised offers even higher.

Select Harvests told investors last week the combination of improved sea freight movement and a smaller US harvest could result in an appreciation of the almond price as the industry adjusted to a tighter supply scenario.