Jack Mariani, a third-generation Sacramento Valley walnut grower, wasn’t the only one raising an eyebrow when the USDA released its 2012 California Walnut Objective Measurement Report in early September.
Based on an August survey of trees in 738 walnut orchards, NASS forecast California will produce 470,000 tons of walnuts this year. That would be 2 percent bigger than the 2011 crop of 461,000 tons.
“Most of the industry thought the forecast would be around 500,000 tons,” says Mariani, a partner in Mariani Nut Co., a large walnut growing and processing operation based in Winters, Calif. “We were a little surprised and a little disappointed.
That disappointment stems from the short 2011 crop, which followed the record 503,000-ton crop of 2010. Limited supplies following last year’s harvest sent prices soaring. While profiting growers in the short run, they also put a damper on sales. And that’s a cause for longer-term concern, Mariani notes.
(For more, see: California walnut crop on target for increased yield)
“Right now our industry has quite a few acres of younger trees that aren’t in production yet,” he says. “So, we’d rather have larger production with equivalent grower returns per acre and more reasonable consumer prices so we can expand our markets.”
Prices for the 2011 crop advanced rather quickly following the start of harvest. Marian expects prices for this year’s to start about where they began last fall.
“Because of the tight supply situation, the industry wants the price to be good for growers without stifling walnut consumption,” he explains.
A weak global economy isn’t helping, says Mariani, whose company ships walnuts to buyers throughout the United States and abroad.
In Europe, one of the major markets for California walnuts, the value of the Euro has declined from a year ago, he notes. “As a result, even if the U.S. price of 2012 walnuts is the same as for the 2011 crop, European consumers would have to pay about 10 percent more in Euros than they did a year ago.”
While higher prices could limit sales of walnuts, the role of walnuts in improving human health promises to spur future growth of the market, Mariani adds. Grower-funded research continues to highlight the beneficial role of walnuts in fighting diseases ranging from diabetes and certain types of cancer to macular degeneration and Alzheimer’s.
“The industry continues to be excited about these findings,” Mariani says. “It offers the potential for increasing walnut consumption.”
(For more, see: Wine grape, walnut growing costs examined in new study)