California’s walnut industry has a record 434,000-ton crop to find homes for this year, but that’s only part of the challenge in an uncertain global economy, says Dennis Balint, chief operating officer of the California Walnut Commission.
With a carry-over of 32,000 tons, the industry has a total of 466,000 tons seeking buyers around the world. Against that backdrop, Balint pointed to price disruption ignited by the short 2007 crop of 365,000 tons from the state’s 218,000 bearing acres.
Speaking at the recent Tri-County Walnut Day in Visalia, he said higher prices following the 2007 crop caused less product development and promotion by major food manufacturers.
Instead, cereal giants Post and Kellogg touted their products made with other fruits and nuts. The outcome resulted in walnuts losing their momentum in the marketplace.
That was worsened by “a perfect storm” of economic conditions in exports starting last fall with a stronger U.S. dollar against the Euro, Balint said.
“When the dollar strengthened, people in Europe were reluctant to buy. Then, in response, some handlers dropped prices, and we had the worst thing possible: both the exchange rate moving and the price moving. What buyer is going to buy today when he might be better off buying tomorrow?”
The business lost last September through December could not be made up in January and February of this year, and shipments are off 16 percent from a year earlier.
He said a major concern now is competition from French handlers for in-shell or shelled walnuts sold to Spain and Germany, traditionally two of California’s biggest markets.
California is at a disadvantage because the French do not have concerns about currency exchange rates and can deliver in 48 hours by truck to any market in the region.
“That gives the French stability. Highs and low in the exchange rate are not the issue this year. It’s movement of the rate that makes it risky to buy. The Euro is predicted to be on a roller-coaster for the next year. It’s the worst thing that can happen to us as an industry in October, November, and December,” he said.
The lower exchange of the yen in Japan anticipated in the near future is another peril to sales of California walnuts as economic fear clutches consumers around the world.
Nevertheless, Balint said there some pluses for the industry, and the commission has learned of recent studies that showed daily consumption of walnuts can decrease predisposition to Type II diabetes and prostate cancer.
The commission, Balint said, relies heavily on features in food magazines and other printed media to convey positive news, free of charge, about California walnuts.
He said the commission has no way to control the timing of study results and articles on health benefits and, in turn, cannot key promotions to them, “but we do know that when they are published, people are driven to buy walnuts.”
However, he added, in the future, with the prospects for larger crops, the industry will have to speak “more loudly and directly” to health-conscious consumers via research projects funded by the commission.
To meet the need for additional funds, the commission was scheduled last year for a referendum among its some 4,000 growers to increase the one-cent-per-pound cap on assessments.
After only about 12 percent of the ballots were returned, Balint said, investigation showed the address bar codes for return ballot envelopes were mislabeled by the state printing office and were treated as junk mail by the postal service. Since the number of growers responding could not be determined, the referendum was terminated.
“So we will probably be coming back with a referendum to raise the cap to a penny and a half, either this fall or next spring,” he said.
The importance of water penetration and infiltration in walnut production was underscored by Keith Backman, certified professional horticulturist with Dellavalle Laboratory, Inc., Hanford.
Among other impediments to water reaching the roots, such as hardpan, soil compaction, soil layering, and low salt, is a condition known as water recession.
This occurs, he explained, when irrigations in July and August, when nuts are filling, are as little as 5 percent to 10 percent less than the trees’ true needs. “Then by Sept. 1, because you put on a little less, the whole lower profile dries up, even on ideal soils. The roots are abandoned.”
The solution is to use an auger, a shovel, or a measuring instrument in the field to determine the actual moisture in the root zone.
“It’s like having an accountant to keep from going bankrupt,” he said. “You have to know much water to apply, how deep it is going, and knowing when to replace it to keep the root ‘factory’ working.”
Short moisture, Backman said, not only impairs the current year’s production but the succeeding season as well.
Dave Ramos, research director for the California Walnut Board and former Stanislaus County farm advisor, traced the development of walnut orchard canopy design over the past 40 years.
A common problem is walnut trees begin to crowd after 10 to 12 years, creating an elevated bearing area and reduced nut size and quality. As an alternative to costly hand pruning, mechanical hedging can help maintain tree size and production of precocious lateral-bearing varieties that have not yet become crowded.
In summarizing some generalities from the body of research for Payne, Hartley, and hedgerow orchards through the years, Ramos said pruning may not necessarily increase production over non-pruning. If trees are left for a long period of time after developing a full canopy, pruning may impair production.
“But in spite of that,” Ramos said, “there are very good reasons for pruning. If you do not prune, you can reduce nut size and quality and you can increase dead wood. The best system seems to be some kind of rotation of hedging.
“To maintain high production, nut quality, and tree size, the real trick is to find the best system for your orchard, the variety you have, and the spacing.”
Bruce Lampinen, walnut specialist at the University of California, Davis, reported on his continuing research into the relationship between light interception and yields in walnuts.
Using computerized, light-sensing devices mounted on a boom carried by an ATV, he is measuring the sunlight in the middle of orchards and comparing it with full sunlight outside the orchard to calculate the amount of sunlight intercepted by the orchard canopy.