Crop estimates leave market unchanged

May 18, 2022

Two new estimates of California’s 2022 crop delivered no surprises, though questions linger about the potential impact of drought on the upcoming harvest.

Separate forecasts last week from the USDA’s National Agricultural Statistics Service (NASS) and an industry group put California’s upcoming harvest at 2.8 billion lbs, not far from a 2.9 billion lb forecast last month from California-based Terra Nova Trading (TNT) and about 100 million lbs less than this year’s crop.

A California packer welcomed the convergence of the estimates, saying it could increase trade liquidity and make it easier for packers to shed another year of abundant supply.

“It’s nice to see everybody coalescing,” the packer said on Monday. “I think it lends some stability.”

NASS released its estimate on Thursday, while an industry group made up of The Wonderful Company, Famoso Nut Company and Ag Wise Enterprises released its estimate Wednesday.

All three estimates cite different bearing acreage: 1.38 million acres (TNT), 1.37 million acres (NASS) and 1.34 million acres (industry group).

The industry group acreage estimate was based on consulting firm Land IQ’s May 2 acreage report, which is produced in cooperation with the Almond Board of California.

Some expect bearing acreage this year to be lower due to the drought. California is entering its fourth year of drought, which is increasing water costs and making it inaccessible for some growers. Higher water costs combined with lower market prices are prompting some growers to abandon orchards.

The three estimates show different yield-per-acre forecasts, from 2,040 lbs (NASS), 2,093 lbs (industry group) and 2,100 lbs (TNT). The average yield per acre during the 2015 drought was 2,000 lbs, according to NASS.

In a market report Thursday, a Madera County packer said the market had been trading with a 2.8 billion lb estimate in mind. Most market participants took the new estimates in stride.

“Buyers’ opinion seems to be that nothing has changed,” said a broker in Spain. “2.8 (billion lbs) was expected, and the carry continues looking like (it will be) huge.”

Another record carry-out combined with a large 2022 crop suggests sellers will have a lot of inventory to manage.  

Based on this crop year’s monthly shipping average of 214 million lbs, California could end up with a roughly 884 million lb carry-out, given inventory of 1.5 billion lbs at the end of April. That would mean total supply from 3.56-3.72 billion lbs, more than this year’s 3.51 billion lb supply.

However, if California ships 245 million lbs for the final three months of the crop year as it did in March and April, the carry-out could drop to 791 million lbs.

“I think (the 2.8 billion lb estimates) will keep things stable,” said a Kern County packer. “I wouldn’t be surprised if we see a lower (harvest) number due to water issues, but I don’t think it can be worse than 2.6 (billion lbs).

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