What is in this article?:
- California tree nut crops on fast track
- China, China, China
- Tree nut markets are a “major reason” land prices in Central California have shot to $22,000 for open farmland to almost $30,000 for an established pistachio orchard in Kern County.
- China has been the economic driver for the nut industry worldwide.
- Potential potholes in the tree nut superhighway include food safety issues, a strengthening dollar and the ever-present threat of the U.S. trading away overseas markets for U.S. commodities in exchange for a diplomatic or military concession.
China, China, China
California produces 90 percent of the world’s almonds. That puts the destiny of the industry in its own marketing hands. Right now those hands are throttling back new plantings. Although new orchards continue to be planted, the rate is slower than for pistachios.
Seventy percent of California’s almonds are exported with China taking an increasingly larger share of the market.
One in four U.S. nuts is exported to China today.
Although there is a 2.2-billion pound almond supply (new crop plus carry-in) going into this year, sales are good and the carry-in for 2012 is expected to be about 315 million pounds, a manageable one-month shipment supply.
“The Almond Board has done a very god job of promoting almonds. Consumption is strong and may actually outstrip the rate of production increases in the near future,” Zion adds. Almonds have passed cashews as the second most popular nut.
Peanuts remain No. 1.
Walnuts are a late participant in the nut industry rocket ride, but are coming on strong. Once again it is China making all the difference in the world.
“Walnut prices have been going up and up and up,” Zion says. One reason is there was practically no carry-in coming into this year.
New walnut orchards are going in rapidly, particularly in Northern California and the Sacramento Valley. Zion adds that there is a two-year wait for trees from nurseries.
There are a few pecans in California, but there are large commercial orchards in Arizona and New Mexico. Pecan prices are at historical highs. They are approaching walnut prices, Zion says.
Macadamia nut growers are experiencing the “best three years ever.”
Zion said there are almost $700 million dollars in U.S. nut imports into China annually. The depressed value of the dollar has helped in China as well as U.S. exports worldwide. A growing worldwide middle class is also responsible for part of the increased of almonds, walnuts, pistachios, pecans and macadamias.
Asked to look into the near future for the tree nut crops, Zion used three words: “China, China, and China.” The most populous nation in the world has been the economic driver for the nut industry worldwide.
However, Zion said “we cannot rely on China” forever. “If we do we are pretty dumb.”
Zion says tree nut markets must increase domestic marketing efforts as well as expand export markets in places like South America, Southeast Asia, Indonesia, South Korea and Europe.
Potential potholes in the tree nut superhighway include food safety issues, a strengthening dollar and the ever-present threat of the U.S. trading away overseas markets for U.S. commodities in exchange for a diplomatic or military concession.
However, for now it full throttle and hang on.