Read the instructions carefully.
This one was rather obvious and therefore difficult to troubleshoot.
I did a binary upgrade of FreeBSD via freebsd-update, rebooted and then tried portmaster -a. This resulted in a "The value of DISTDIR cannot be empty" error.
What I should have done was run freebsd-update install again after the reboot. The instructions clearly stated that. There is an argument to be made for having something resembling an attention span.