Walnut industry seeks return to profitability

Economic hard times have punched Western agriculture squarely on the jaw. California’s stitched-up English walnut industry is among the agricultural sectors hoping for a return to profitability as the 2009-2010 harvest nears.

The 2007-2008 crop year was the cat’s meow for walnut growers with prices in the $1.25 a pound range. Yet as tree shakers entered orchards last fall to harvest the 2008-2009 crop, the industry was brought to its knees by a perfect storm of events.

Walnut prices plummeted to apporoximately 60 cents per pound amid the recession, an unpredicted record crop, and an incorrect crop estimate which stifled walnut purchases.

“You not only had the recession here in the U.S. but the world economy was in a shambles,” said Dennis Balint, executive director of the California Walnut Board and chief executive officer of the California Walnut Commission, Folsom, Calif.

“It all happened in (last) September and October when we were setting price and making our initial offerings to the marketplace,” Balint said.

The California Agricultural Statistics Service’s 2008 Objective Walnut Forecast of 370,000 tons missed the actual crop size by 65,000 tons (15 percent lower). The 2008-2009 crop was actually a record-shattering 435,000 tons.

“You talk about a kettle of fish; all of a sudden we had a huge pile of walnuts that no one expected,” Balint said.

This summer growers have increasing optimism that an industry turnaround is near. China, Turkey, and other countries this year placed substantial walnut orders which reduced the large crop carryover to within the normal range.

With the kickoff of walnut harvest just weeks away some growers and farm advisors expect an average to slightly smaller crop from last year with prices possibly 30 percent or more higher. That was of late July; a lot can happen down the road.

California’s 4,000 walnut growers grow 99 percent of the nation’s walnut crop. The heart-healthy nut is grown from Red Bluff in Tehama County in the north to south of Visalia in Tulare County, with many weather micro-climates in between. The industry includes about 60 processors.

Most walnuts are grown on the East Side of the San Joaquin Valley (SJV) where winds are less breezy compared to the West Side. Walnut trees require about 5 acre-feet of water annually. “The crop this year is not a barn buster by any means; it will not be a real short crop,” said Bob Beede, University of California Cooperative Extension (UCCE) farm advisor, Kings County. “The talk is walnut prices could be 20 to 30 cents (per pound) higher than last year.” That could peg prices in the 80 to 90 cent range.

Walnut farmers have experienced good-growing conditions overall this year despite sizzling 100-degree temperature periods lasting more than a week.

“While driving around the countryside I’ve seen that growers stepped up to the plate when it got hot and properly irrigated the trees,” Beede said.

“When temperatures get above 90 degrees, the walnut tree has its tongue hanging out. It has to suffer through the heat of the day. That’s why it’s important to water in the evening when the temperatures are cooler so trees have a chance to recover.”

Hot temperatures caused sunburned nuts in some orchards which can lead to mold, shriveling, and off-colors from a light tan to black. Some growers effectively applied white, reflective materials to tree canopies to gain sun protection. The materials can lower temperatures about 10 percent.

In southern SJV orchards, Beede says the Tulare variety is a high producer while the Serr and Chandler varieties look fair. No serious mite problems have been reported thanks to a new arsenal of miticides with improved efficacy. The absence of rain has prevented walnut blight.

Beede says lower populations of the insect codling moth, Cydia pomonella, early in the season led some pest control advisers (PCAs) not to spray. Moth numbers later increased and PCAs sprayed accordingly.

Codling moth larvae from the last part of the first generation and from the second and third generations cause damaged kernels resulting in unmarketable nuts.

Beede says the general break-even point for growing walnuts is about 50 cents/pound. “At 50 cents your kids are not going to college,” Beede said. “It costs about $2,000 an acre to farm walnuts. Growers risk a lot of money.”

Hanford grower Paul Stanfield, owner, Summerfield Farms, is predicting a 4,000 pound/acre crop on his Seer, Vina, Chandler, Tulare, and Tehama varieties; a slightly-lower crop with the Seer and Vina nuts looking the best.

Stanfield flood irrigates with surface water from the Pine Flat Dam near Piedra on the Kings River along with well water. Older tree spacing is at 30-by-30 feet while five-year-old trees are planted in a 28-foot equal lateral triangle.

Last year’s walnut price collapse caused Stanfield to delay equipment purchases and focus available dollars on crop cultural practices. Stanfield’s production cost is about 50 cents/pound. He is hoping for 80 cent-plus prices for the new crop.

“It would mean you get to farm for another year,” Stanfield laughed. “It would be like getting a raise; it gives you more breathing room. Eighty cents provides a little cushion.”

Stanfield says pressure is increasing to replace tractors to comply with new mandatory California Tier 3 and 4 engine requirements. Extra crop income could allow equipment upgrades.

Hanford grower Jeb Headrick predicts 5,500 pounds to 6,000 pounds from most of his ranches.

He plants triticale as a winter cover crop in the orchards to minimize tree stress since the plant’s large-root structure creates improved water absorption in the soil. Headrick converted 80 acres of his furrow-irrigated farm to a microsprinkler system which created healthier canopies within one year.

Walnuts are the second-largest producing crop in Sutter and Yuba counties after rice. UCCE Farm Advisor Janine Hasey says the two counties’ walnut crop looks “Fairly decent depending on the variety. It’s a good crop, but not quite as large as last year.”

Last year all varieties in Sutter and Yuba counties produced “limb buster” yields, Hasey said. Chandler is the top-planted variety statewide.

“This year the very heavy Howard crop is breaking limbs which isn’t difficult since the Howard has weak wood,” Hasey said.

UCCE Farm Advisor Joe Connell, Butte County, concurs this crop is good, but not as heavy as last year. Butte ranks second statewide in acreage with about 32,000 acres. San Joaquin County is the No. 1 walnut-producing county.

Codling moth and walnut husk fly have been detected in Butte, Connell says. Husk fly causes nutshell staining.

Jack Mariani, partner, Mariani Nut Co. in Winters, is a third-generation walnut grower with several thousand acres of walnuts plus a processing facility.

“This year’s crop is not last year’s, but it’s a nice crop,” Mariani said. “We’re happy with it.” His yields could total 4,000 pounds/acre.

On the processing side, Mariani said the company has increased its food safety focus. “We’re redoubling our efforts and increasing investments in different online processes that will guarantee food safety to produce the safest possible product,” Mariani said.

Jack Gilbert, owner and president of Gilbert Orchards and Rio Oso Groves near Wheatland, predicts 10 percent less production this year.

“I think we’ll see (prices) firming in the market,” said Gilbert whose 750 walnut acres straddle the Sutter and Yuba county lines.

Gilbert has experienced good codling moth control using pheromone mating disruption in recent years. “This has had a significant impact on (reducing) the mating of the codling moth.” Gilbert has not found a single moth in traps this year.

The Walnut Board’s Dennis Balint talked with 22 growers who had “64 opinions” on this year’s walnut crop.

“I think we’ll be OK on quality and weather will not be an issue,” Balint said. “But that’s of late July. You give me 10 days of 100-plus degrees at the end of August and I’ll change my tune.”

California has about 223,000 bearing and 30,000 non-bearing acres of walnuts.

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TAGS: Tree Nuts
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