Laura Gerhard
Vice President
OVERVIEW
Shipments for April totaled 241.5 million pounds marking a 2% increase from the previous month and a 22% rise compared to the same period last year. April marks the second strongest shipping month of the crop year to date, well above industry expectations. Domestic shipments reached their best performance of the year at 64.8 million pounds, reflecting a 4% increase from the previous month and a 14% increase over last year. Export shipments turned in another strong month at 176.7 million pounds, up 1% to last month and up 26% to last year. Total shipments increased their lead over last year’s pace and are now 4.2% ahead.
SHIPMENTS
India: Shipments to India reached 33 million pounds, a 64% increase from last year with year-to-date shipments now 18% ahead of last year. Buying activity was limited in the weeks leading up to the Subjective Estimate but quickly picked up following its release. This uptick was expected given India will have to cover a good portion of its needs for Diwali from current crop supplies. The 2024 Diwali festival begins October 31, approximately two weeks early than the prior year. Demand is expected to persist in the coming weeks.
China/Hong Kong/Vietnam: Shipments to the region totaled 12 million pounds, a 2% increase to last year. Year-to-date shipments are 13% behind last season. Buying activity was quiet and mainly limited to Australian purchases leading up to the Subjective Estimate. Activity increased following the estimate release with buyers beginning to make new crop purchases.
Europe: Shipments to the region totaled 54 million pounds, a 6% increase over last year. Year-to-date shipments are now 6% ahead of last season. Demand has been favorable, driven by an increase in snack consumption in recent months, primarily due to more favorable pricing at the retail level.
Middle East: Shipments to the Middle East were 27 million pounds, up 55% to last year. Year-to-date sales are now 4% ahead of last season. This region has been quite active with affordable pricing driving post-Ramadan demand. Buying activity is expected to continue as the market positions itself for the upcoming Eid al Adha festival in June. This region is expected to remain a bright spot for the industry going forward.
Domestic: April shipments reached 64.8 million pounds, the strongest monthly performance all year, up 14% over the prior year. Year-to-date domestic shipments now stand at 547 million pounds, which is a modest 0.6% ahead. Buyers have re-entered the market as indicated by an 8% increase in sales over the previous month. With the published Subjective Estimate within industry expectations and a strong April shipment report, contracting activity is expected to pick up the balance of current crop year.
COMMITMENTS
Total commitments improved for the third consecutive month compared to last season and now stand at 552.7 million pounds, which is 2% behind last year. Uncommitted inventory remains favorable at 557.7 million pounds reflecting a 29% decrease from last year. Buying patterns have remained hand-to-mouth all year, still seeing strong new sales for the month at 218.6 million pounds, up 20% to last year. Total new sales for the year now exceed last season by 7%. Assuming a 2.45 billion pound crop, shipments and commitments represent 84% of total supply versus 76% last year. Given the current level of total commitments and the strong shipment pace sustained this crop year, the industry is on pace to reach a carryout below 500 million pounds, a level not seen in the past three years. This is a welcome sign and much needed as the industry eyes a larger 2024 crop ahead.
CROP
Land IQ posted their estimate for crop year 2024 bearing acreage of 1.373 million acres. This is a slight downturn from last year. The non-bearing acreage estimate will be released in November and is likely to be lower than last year’s 189,000 acres. New plantings are declining given the economic challenges for the grower. Total acreage peaked in 2021 at 1.65 million acres and has been trending downward. Depending on the results of the non-bearing portion, acreage has declined 8-10%.
The 2024 Subjective Estimate was released on May 10 with the NASS forecasted a 3.0 billion pound crop against 1.38 million bearing acres which are unchanged from last year. This implies a yield of 2,170 pounds per acre. This estimate is widely considered price-neutral given the industry was already pricing in a 3.0 billion pound crop.
| Market Perspective
April shipments exceeded market expectations for a second consecutive month. Both export and domestic shipments turned in a strong performance to increase the shipment pace over last year while improving expectations for a carryout at or below 500 million pounds. Market activity had been limited with buyers waiting for the Subjective Estimate for price clarity and confidence. Buying activity is starting to pick up with that estimate behind us confirming market expectations for a 3.0 billion pound crop. The demand outlook is positive as buyers look to cover their remaining needs of current crop supplies to ensure a smooth transition to the new crop. This should provide for stable to firmer pricing in the coming weeks. |
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