The Central Valley will be expecting triple digit temperatures for the next 5 days.  These are unseasonably hot, well above normal for this time of the year, and will likely set records in many areas.  This leads to increased stress on the orchards and of course pressure on the water supply.  There are already signs of the drought in the southernmost region of the state and some orchards being abandoned, older trees being pulled out and reverse irrigation being used. Reviewing the drought maps really shows significant differences compared to the 2014 drought. What we see today is much wider spread up and down the state, not necessarily affecting one area more than the other.  To put it another way, our state is in trouble.  While the drought may have less impact on the 2021 crop, concerns over the future crops will become relevant, especially if we do not have a strong wet winter and an even better snow pack next year.  It is not too early to be adding this to the equation as it may take several winters to play catch-up.

 The industry has had time now to contemplate last week’s shipment report.  With total shipments for the year at 2,448 billion pounds and 21.4% over last year, sellers are feeling very confident. As a result, the market continues to firm this week with few active sellers.  This is attributed to several factors including the drought. The carry-out, despite being +160 million pounds over last year, will bridge the gap between current crop and new crop nicely, especially for ingredient manufacturers.  Additionally, despite the larger carry-out, many sizes and varieties are unavailable.  Historically, when a carry-out is 20% or less of the total crop, crop prices are higher the following year.  Finally, sellers are waiting for the objective estimate due July 12th before offering new crop. 

Remaining Benchmark Dates:

  • Next shipping report: July 9, 2021 (new crop sales will continue to be reported)
  • Objective Estimate: July 12, 2021
  • Final shipping report for the 2020 crop year: August 12, 2021

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