“The outlook for the walnut industry is much brighter than a year ago,” says grower and processor Don Barton, president of GoldRiver Orchards, a family-owned operation based in Oakdale, Calif.,
The harvest of last year’s record size crop coincided with financial markets in freefall, creating a credit crunch that sidelined many would-be buyers of the state’s walnut production. Making matters worse, buyers in major markets like Spain, Germany and Japan were sitting on large volumes of higher-priced old-crop product.
“As a result, during the peak selling period for growers last year, the market was extremely slow, creating huge price pressures on walnut handlers, who may have had weak working capital positions and needed to convert their walnuts to cash quickly,” Barton explains.
“The net effect was that prices dropped precipitously during the fall and winter. Instead of moving walnuts in the traditional October through February period, most shipments were made from March through August this year.”
GoldRiver Orchards processes walnuts from its own trees and also buys from other San Joaquin Valley growers. Although its largest single market is the United States, the company exports the majority of its products to markets in the Far East, Europe, the Middle East and Australia.
“We’re getting a lot of inquiries from buyers in Europe and the Middle East and to a lesser extent, from Japan,” he says. “However, the Japanese buyers are much more active than they were last year.”
Barton describes the estimated 50,000 to 55,000-ton carryover from California’s 434,000-ton 2008 crop as very manageable. The fact that it’s not bigger is due in large part, he says, to huge increases in walnut imports by Turkey, Korea and China. During the 2007 crop year, for example, the Chinese bought 830,000 pounds of in-shell walnuts, he reports. This year, their purchases skyrocketed to 28 million pounds.
“Clearly, part of these increased imports reflected the attractive walnut prices, especially in the second half of this crop year,” he says. “Meanwhile, the U.S market for shelled walnuts grew moderately from 149 million pounds for the 2007 crop to 158 million pounds this year. Given the state of our economy, that’s a pretty big accomplishment.”
Looking ahead, Barton expects increasing demand to keep pace with expanding walnut production.
“We are in an era of very large walnut crops in California,” he says. “Many thousands of acres of new plantings over the last five years or so are beginning to come into production. I believe long-term walnut prices will remain moderate. Demand for our products is very strong — driven in part by efforts of the California Walnut Board to promote the many health benefits of walnuts.”