USA Report, page-186

With lens of the local media fixated on the varroa outbreak in NSW, it would be all-too easy to overlook the important objective estimate report that was released overnight in the United States.

Attentive shareholders might recall that back in May, the NASS subjective report had forecast a Californian almond crop of 2.8 billion pounds.

Given the drought situation in California, and the bloom-time frosts that impacted some orchards in the north of the state earlier in the year, there was some reason to be sceptical about this estimate.

And sure enough, the Californian objective report that has just been released has found that the 2022 Californian crop is likely to be well down on the previously released estimate.

Based on samples taken from 880 orchards across the state, Friday's objective measurement forecast by the U.S. Department of Agriculture's National Agricultural Statistics Service came in at 2.6 million pounds, 7 percent lower than the agency's subjective estimate released in May.

This is the second year in a row in which the subjective estimate has proven to be well off the mark. Last year, the subjective estimate was for a 3.2 billion pound crop, but, the eventual crop was almost 10% lower, weighing in at 2.9 billion.

It seems likely that we will see a rise in the almond price following on from the release of this report. Certainly, this seems to be the conclusion of RPAC almonds, judging by their commentary in their latest update:

...A 2.6 billion lb. crop would mean 2.55 marketable, which combined with an estimated 775 million lb. carry-in, would mean total supply of 3.325 billion lbs. Compared to the 2021 crop year’s approx. 3.46 billion lbs. this would mean a decrease in total supply of 135 million lbs. (4%). If shipments can stay on track like we’ve seen in recent months, we could put a significant dent in the carry out going into the 2023 crop year.

Growers seem glad to receive some good news considering everything that’s been happening lately...

Of course, as anyone reading this would be well aware, California isn't the only almond growing region under the pump at the moment.

With the varoa situation in NSW raising questions about the viability of the almond pollination in that state, and with NSW typically producing around 30% of Australia's almonds, potentially, we could be looking at a significant decline in almond production in the two largest almond growing countries in the world, with obvious implications for the price of the nut in question. It is certainly possible that a shortfall in almond production resulting from the biosecurity issue in NSW might be offset by a higher almond price several months down the track.

Thus, the almond price roller-coaster rolls ever on, and there is some good reason to think we might just be about to climb out of another dip in the cycle. That, I think, offers a ray of light amidst the gloom.