The verdict is out, NASS estimated the 2019 crop at 2.2 billion pounds brining the once estimated crop of 2.5 billion pounds down 12 percent (Subjective Estimate 2.5 bb lbs.). Shockwaves were felt throughout the industry the moment the estimate was announced, and almost immediately one could stipulate what market reaction would ensue.
The industry had been working off an estimated 2.5 billion pounds with the expectation that the objective estimate would match or slightly exceed the first estimate. The supply and demand equation drastically changed in a matter of one announcement. Now California will attempt to use pricing to manage demand assuming a crop size of 2.2 billion pounds and a historically low carry-out.
In short, the estimate outlined bearing acres at 1.17 million acres, an average nut set per tree down 17.8 percent, and an overall yield per acre down roughly 10 percent at 1,880 vs. 2,090. If all of this comes to pass, the overall crop for 2019 would be smaller than last season by 3.5 percent.
Remember this is only an estimate but at the same time this is what we have to work with for the time being. We would expect the market to firm across all items on current and new crop, and until more is known about the 2019 crop California will market based on tight supply.
What to watch for:
- The release of the June shipment figures July 11th.
- Trade Negotiations