From a news release:
California walnut growers have seen a significant surge in production over the last couple of years. This spike in production, coupled with the recent decline in prices, has heavily influenced the export market for walnuts. California walnut growers have harvested over 450 thousand in-shell equivalent tons since 2010/11 – and are expected to harvest over 620 thousand in-shell equivalent tons in 2016/17. The average production for the last ten years is nearly 65% higher than that of the previous ten years. This ongoing growth, supply and demand trend is examined in Rabobank’s Food & Agribusiness Research and Advisory note titled “California Walnuts – Confronting Growing Production.”
According to the note’s author, Vernon Crowder, the price of walnuts has been steadily dropping in recent years. “Market prices for California walnuts began to see a gradual decline beginning in September 2014, and a more severe drop late last season – in June 2015,” said Crowder. “In recent months. Combos – a mix of varieties and light and dark meats – and darker meats hit a price floor, and have since strengthened somewhat.” Recent inclement weather patterns were detrimental to the walnut crop in Chile, a top producer of quality walnuts.
The report concludes by highlighting the recent increase in walnut plantings, both in the U.S. and abroad. “During the last ten years, U.S. walnut acreage has increased by 100,000 total acres – current estimates suggest that non-bearing acreage is approximately 65,000 acres,” said Crowder. “Even if older, lower yielding orchards are removed in California, its harvest is projected to be more than 700 thousand in-shell equivalent tons by 2020.” The note concludes by pointing out the recent investments in marketing. Even with exports of U.S. walnuts continuing to increase, marketers are still making a valiant effort to increase domestic consumption of walnuts as well.
This report is the third of a series of research notes that Rabobank has planned to highlight the major tree nuts grown in the U.S.