Pacific Nut Producer Magazine

Category: Laws & Regulations

  • China Tree Nut Production & Import Forecast

    Awareness over the health benefits of tree nuts has increased consumer demand over the past five years. Manufacturers are developing creative products to meet demand from millennial and other consumers. Almond imports in Marketing Year (MY) 2021/22 are expected to continue rebounding on firm demand in the post COVID-19 pandemic era. Despite a projected increase in pistachio imports from the United States, overall pistachio imports are likely to drop in MY 2021/22 due to a sharp decline in Iranian supplies. Walnut imports from the United States are projected to decline in MY 2021/22 due to price hikes amid a smaller crop. China’s commercial in-shell walnut production is forecast at 1.1 MMT in MY2021/22, unchanged from the previous year. Tree nut imports may be affected by new registration and labeling requirements.

    Production

    Walnuts

    China’s commercial walnut production (in-shell basis) is forecast at 1.1 million metric tons (MMT) in marketing year (MY) 2021/22 (September-August) and is unchanged from estimated MY 2020/21 walnut production. A spring frost may cut production in Xinjiang, the largest walnut producing province, by 20 percent from last year, but production gains in other major producing provinces, including Yunnan, the second largest walnut producer, are expected to offset the crop losses in Xinjiang. China is the world’s largest walnut producer, with nearly half of global production.

    China’s total walnut production will continue to increase in the next few years as more walnut trees mature, but the degree to which these nuts enter commercial channels is dependent on price. China’s total walnut production is unknown but is significantly higher than commercial production. Many walnut trees were planted on slopes, are of unpopular varieties, and are difficult to maintain or mechanically harvest. With low prices, walnut traders believe farmers will not be able to cover the labor cost to harvest these trees. In southern Xinjiang, however, walnuts are planted on plains and production is largely mechanized. Coupled with improved infrastructure, Xinjiang walnut production has increased rapidly over the past few years and the province will become the most important hub for the Chinese walnut industry.

    More than 50 walnut varieties are cultivated in China. Some varieties, like the thin-shelled ones from Xinjiang, are large-sized and have a high kernel to in-shell nut ratio. Nevertheless, very few varieties compete with those from the United States and Chile, such as Chandler and Hartley, that are popular among consumers for their features such as light color and mild (i.e., non-bitter) taste. Post has not heard of similar varieties being developed or planted in China.

    Almonds

    China’s shelled almond production is forecast at 42,000 MT in MY 2021/22 (August-July), down nearly 7 percent from the previous year, due to frost damage during almond flowering in the spring, according to contacts in Xinjiang. Shache county in southern Xinjiang produces more than 95 percent of the country’s almonds. The almond yield is low at 3.0-3.8 MT per hectare due to a lack of proper crop management and agricultural inputs as well as the use of unproductive varieties. As a result, Xinjiang almonds are sold mainly within the region. China relies heavily on imported almonds for domestic consumption.

    Almond acreage remains stable at around 63,000 hectares in Xinjiang. A private company in central Henan province has reportedly planted around 50 hectares of almonds for experimental purposes. It remains to be seen whether this trial production can be successful. 

    Pistachios

    China produces very few pistachios. The experimental production of pistachios in Xinjiang was unsuccessful due to weather and disease challenges. Farming technology is another issue associated with pistachio production in China.

    Other nuts-Macadamia, Hazelnut, and Pecan

    China’s in-shell macadamia nut production is forecast at 32,000 MT in MY 2021/22 (September- August), with an additional 9,600 MT of shelled macadamia nut production, according to data released by the International Nut and Dried Fruit Council (INC). The in-shell and shelled production amounts are increases of 5 and 9 percent, respectively, from the previous year. The production of macadamia nuts has increased rapidly over the past few years on expanded crop area, which is currently estimated at 31,000 hectares, according to industry sources. Macadamia nuts are mainly planted in mountainous areas of Yunnan province and plains of Guangxi province. Industry sources indicate that China will soon become self-sufficient in macadamia nuts and even a significant exporter in the foreseeable future. However, they also note that Chinese macadamia nut varieties – mainly introduced from other countries – suffer from low yields and mixed quality.

    China’s production of commercially cultivated hazelnuts (hybrid varieties with large size) has increased quickly, with production reaching 35,000 MT (in-shell basis) in MY 2021/22 (September-August) on a planted area of 112,000 hectares, according to an industry report. Hybrid hazelnuts are planted in Liaoning, Jilin, Heilongjiang, Shandong, Inner Mongolia, and Hebei provinces. China also produces wild hazelnuts (of smaller size), and the production and crop area is quite stable. In MY 2021/22, production of wild hazelnuts is forecast at 33,000 MT on 88,000 hectares, according to the report. Wild hazelnuts are produced mainly in Liaoning province.

    Pecan production (in-shell basis) is forecast at 4,000 MT in MY 2021/22 (September-August), doubled from the revised production of 2,000 MT in MY 2020/21, according to an academic report. Pecan production is expected to continue increasing as more trees begin to bear. The report estimates China’s pecan planted area, which is mainly in Anhui, Yunnan, and Jiangsu provinces, at 80,000 hectares in 2021, but pecan acreage is unlikely to increase following guidelines issued in November 2020 by the State Council to prevent expansion of non-grain crop areas on arable land.

    Price

    Walnut harvest has just begun. The farm gate price for in-shell walnuts is currently RMB 10.5 per kilo (U.S. $1.64) in Yunnan, down nearly 20 percent from the same period of last year, according to Yunnan traders. In Xinjiang, the best-selling variety (No.185) is currently sold at RMB 16.3 per kilo (U.S. $2.55), an increase of more than 9 percent from the same period of last year due to reduced supplies, according to local traders. In general, China’s walnut prices have been declining along with production increases. In-shelled almonds are sold at RMB 40 per kilo (U.S. $6.25) at Xinjiang farms, an increase of 5 percent on a yearly basis, according to media reports.

    Consumption

    Tree nuts are generally consumed as snacks in China. “Daily nuts”, a mixture of different nuts, dried fruit, and seeds in retail packages, have become the principal pattern of nut consumption in China. The per capita consumption of tree nuts, which used to be luxury foods, is still low compared with the level in western countries. In recent years, tree nuts have quickly become a necessary component of the diet for urban consumers, as awareness of the nutrition and health benefits of tree nuts increased. This is particularly true following the outbreak of COVID-19 – as people believe that tree nuts will help them build a stronger immune system. According to a market survey of consumers aged 18-49 in early 2021, about 67 percent of consumers will choose healthier food and 47 percent of consumers hope to eat foods that reduce the risk of having diseases such as diabetes and hypertension. Tree nuts are considered an ideal food product to satisfy the above-mentioned needs.

    The food processing sector also consumes a small portion of tree nuts. Bakery and confectionary sectors are typical consumers of tree nuts. In addition to traditional products such as walnut milk and moon cakes with nut and seed stuffing, newly developed nut-containing products such as nut bars and meal replacement bars (and balls) have emerged. As more products using tree nuts as ingredients are developed nut consumption will expand further.

    Policy

    The State Council Tariff Commission (SCTC) launched a tariff exclusion process on March 2, 2020, to allow importers to apply for tariff exclusions on certain agricultural products, including tree nuts, from the United States. If an exclusion application is approved, the Section 301 retaliatory tariffs will be exempted for a year from the date of approval (refer to GAIN report CH2020-0017). However, U.S. tree nuts, among other agricultural products, are still subject to Section 232 retaliatory tariffs that have been imposed since April 2018. The following table provides information on import tariffs and value- added tax (VAT) rates for various nuts.

    The Chinese government released an updated National Food Safety Standard on Pesticide MRLs in Food which takes effect on September 3, 2021. Please refer to GAIN report CH2021-0099 for specific pesticide limits on nuts.

    On April 12, 2021, the General Administration of Customs of China (GACC) announced the Regulations on the Registration and Administration of Overseas Producers of Imported Food, known as Decree 248. Effective on January 1, 2022, this regulation will replace the existing Administrative Measures for Registration of Overseas Producers of Imported Food (Decree 145). Decree 248 requires that all overseas food (including tree nuts) manufacturers, processors, and storage facilities be registered with the Chinese authorities in order to export products to China (see CH2021-0045). However, the registration process cannot begin until GACC publishes the implementation rules. There are also requirements in Decree 248 for inner and outer package labeling of tree nut imports.

    Trade

    Imports

    Except for walnuts, China relies heavily on imports for most tree nuts, especially pistachios, almonds, and pecans. Following trade tensions between China and the United States in 2018, and logistic disruptions caused by COVID-19 in early 2020, China’s tree nut imports finally began to rebound in MY 2020/21 as economic activities gradually resumed and China launched a tariff exclusion process in March 2020. The Chinese government has streamlined the import practices so, instead of being transshipped through a third country, most tree nuts now enter China directly from the country of origin.

    Despite industry information regarding reduced supplies in California because of a U.S. drought, China’s almond imports are expected to continue to rebound due to strong demand. The United States remains the largest almond supplier to China, followed by Australia, who has become another important supplier, taking advantage of a bilateral free trade agreement.

    Although China’s pistachio imports from the U.S. are expected to rebound, total imports will probably be lower in MY 2021/22 (September-August) then in the previous year due to reduced supplies and extremely low carry-in stocks in Iran, the largest pistachio supplier to China. Iran accounted for 65 percent of China’s pistachio imports in MY 2020/21, but its production is forecast to drop by more than 20 percent in MY 2021/22. According to industry contacts, Californian pistachio production will be affected by drought, but carry-in stocks reportedly strengthen the pistachio supply situation in the United States. It is estimated that China imports nearly 20 percent of global pistachio production.

    China’s pecan imports are forecast to increase in MY 2021/22 (September-August) due largely to a strong rebound from the United States, which has regained the role of the top supplier to China. American pecan exports to China declined significantly in MY 2018/19 following retaliatory tariffs imposed on U.S. products in April 2018. Consequently, Mexico and Africa overtook the United States as the top two suppliers.

    China’s walnut imports from the United States are expected to decline in MY 2021/22 (September- August) following a projected 15-percent decrease in production due to drought in California. Walnut imports from the United States rebounded in MY 2020/21, largely because of lower prices in the wake a bumper crop. Taking advantage of a bilateral FTA, Chile has become the second largest walnut supplier to China. China’s walnut imports keep declining because of increases in domestic production. Relative to overall production and distribution, China’s walnut import volume is small.

    China’s inshell hazelnut imports from the United States remains stable, as Chinese consumers like the large size of U.S. hazelnuts. China also imports shelled hazelnuts from Turkey for food processing purposes.

    Exports

    China’s walnut exports, both in-shell and shelled, are expected to increase moderately in MY 2021/22 (September-August). Reduced supplies in Xinjiang and increased transportation cost will likely slow Xinjiang walnut exports to Central and West Asia – including Kazakhstan, Kyrgyzstan, Turkey, and Pakistan. In MY 2020/21, China’s walnut exports (in-shell basis) to these countries increased by nearly 30 percent. Due to a color and taste disadvantage, Chinese walnut prices are 15 percent lower than those of major walnut exporting countries such as the United States. For the same reason, Chinese walnuts, especially shelled walnuts, are difficult to export to major markets such as the European Union.

    Although the total volume is relatively small, China’s macadamia nut exports are steadily increasing as a result of improved domestic production. Australia remains the single largest buyer of Chinese shelled macadamia nuts.

    Marketing

    Market Dynamics, Drivers and Opportunities

    Chinese consumer taste preferences and market trends are different from other markets, and exporters should take care to ensure their products target the Chinese consumer. In China, tree nuts are regarded as healthy foods due to their health benefits. While this interest has traditionally focused on dietary fiber and the high level of unsaturated fatty acids, consumers have recently become more interested in the attributes of “high-quality vegetable proteins”, minerals, and nutrients. The health benefits of tree nuts have increased consumer demand over the past five years, however sales of tree nuts and other foods and beverages increased slowly during the 6-18 promotions on June 18, 2021. NOTE: 6-18 is a marketing holiday in China similar to “Black Friday” to promote consumer spending. There are several similar marketing holidays in China, like 11-11, or “China’s Singles Day” and a lesser-known marketing holiday for tree nuts on September 17, called 9-17.

    With the popularity of healthy diets and a preference for low fat and sugar, the high caloric content of single nut products has become a disadvantage. However, daily nut products that mix various nuts and dried fruits remain the fastest growing snack food category. Mixed packages provide a more balanced nutrient mix and allow producers to react to commodity price changes. At present, more than 100 manufacturers are marketing “daily nuts” products in China, and industry insiders forecast the market will exceed RMB 20 billion (U.S. $3.1 billion) in 2022.

    Tree nuts are also being more widely used in baked goods and other processed snack foods. They have also been processed into nut butter, nut drinks, and even nut oil cosmetics to cater to the growing demand for a natural, plant-based, and healthy lifestyle.

    Competitive Landscape in Market

    East China and Central China host most large tree nut processors. The top players in tree nut snacks are Three Squirrels from Anhui Province, Huatai Foods (with the brand Cha Cha) from Anhui Province, Lyfen Foods from Shanghai, Be & Cherry from Zhejiang Province, Bestore from Hubei Province, and Yan Jin Pu Zi from Hunan Province.

    Snack food brands such as Cha Cha, Yan Jin Pu Zi and Lyfen Foods own thousands of brick-and-motor stores nationwide in China, and its in-store sales account for most of their revenue. Three Squirrels is an internet-born brand that has grown into a tree nuts giant rapidly owing to the fast development and adoption of e-commerce platforms in China in the past ten years. However, according to industry sources, the company is now focusing on developing retail outlets. Also, per industry information, in- store sales accounted for 26 percent of the company’s total revenue in 2020. Bestore and Be & Cheery strive to balance online and offline businesses, aiming to avoid the challenges of rising cost of labor and rent from physical stores, and the delivery and logistics costs of online retail.

    Retailers like Freshippo and Bianlifeng Convenience Store are emerging as important players in the tree nuts industry by aggressively developing private label lines of tree nuts products. COFCO has been further developing its private label SunDry Foods and industry sources repot the company has been successful in the daily nuts business in recent years.

    Innovation and Trends

    Leading manufacturers of “snack” tree nuts and baked goods featuring tree nuts are developing new and creative products to meet the growing demand from millennial consumers. Their purchasing power is growing and has been helping the industry to innovate. The growing popularity of vegan foods among millennials is driving tree nut processors to produce more nut-based drinks, meal replacement bars and powders with tree nuts as ingredients, breakfast cereals, baking and confectionary, butter and spread and dairy products.

    One of the important tree nut market trends is the increased usage of tree nut oils in anti-ageing cosmetics to help retain moisture and fight ageing. Advertised as a skin and hair nourishing agent thanks to the presence of antioxidants, tree nuts are used to cure dark circles, soreness, reduce wrinkles, and protect the skin from harm.

    Freshness, flavors, easy of peeling, and healthy benefits remain key factors driving consumers to purchase tree nuts. Versatility and price are the main factors that influence tree nut processors when developing snack and healthy foods. — By the USDA Foreign Agricultural Service

  • Port Congestion Limits Tree Nut Exports at Harvest

    Water infrastructure is not the only critical issue California needs to invest more in; since the onset of the pandemic, the west coast ports have been overtasked and are in dire need of attention.  Watch this brief interview with Jim Zion from the Agricultural Trade Advisory Council as he explains the issue and its impact on agricultural exports.
    Please thank this video’s sponsor Suterra for their industry support.

  • CA Walnut Board Votes To Modernize Federal Marketing Order And Suspend Enforcement Of Mandatory Inspections Of Walnuts

    Cultivating industry prosperity for the long term is at the core of the California walnut industry’s strategic plan.  A year ago, the Grades & Standards Committee began working with US Department of Agriculture (USDA) looking into ways to update the outbound inspection process in order to remove redundancies and duplicative costs to bring more efficiency to the industry. As part of this process, the California Walnut Board (CWB) voted to suspend enforcement of mandatory USDA outbound inspections of California walnuts.

    This action resulted in USDA issuing a preliminary six-month moratorium on the enforcement of the mandatory inspection requirement, effective September 1, 2021.  The Board’s vote to suspend inspections stands to benefit the industry by mitigating market disruptions (i.e. labor shortages, shipping constraints) during the season. The Federal Marketing Order rules governing inspection, which date back to the Order’s inception in 1948, are obsolete as market and customer quality demands have since surpassed USDA grading standards.

    In addition to USDA programs, many handlers have already invested in state-of-the-art equipment to comply with food safety, quality, and traceability requirements set by the U.S. Food & Drug Administration (FDA), while also employing qualified staff to oversee rigorous programs to meet additional market-driven quality standards.

    “All handlers should know that despite non-enforcement of mandated outgoing inspections, the Dried Fruit Association (DFA) remains available for voluntary inspections and business needs,” said Eric Heidman, CWB Chair of the Grades & Standards Committee.

    The market already demands quality that well exceeds USDA grade standards and handlers will continue to inspect product to the specifications as contracted with their customers.

    “This moratorium will be extended when the CWB goes through the formal rulemaking process to modernize the Federal Marketing Order,” said Joshua Rahm, CWB Director of Regulatory & Technical Affairs. “As part of this process, CWB will establish a new method of assessing walnut handlers. We are hopeful the new authority will be available for the 2022-2023 crop year and expect assessments to be collected following the formal rulemaking process.”

    California walnut grower Donald Norene, stated, “I support the Board’s initiative to streamline and update the inspection process to keep up with current market demands and make it more efficient to save resources, ultimately working harder for the industry.”

    While the CWB works through the rulemaking process, it will continue essential operations by tapping budget reserves to offset the temporary non-collection of assessments.  The Board will be evaluating its spending to determine how to best operate until the formal rulemaking process is complete.

    About the California Walnut Board

    The California Walnut Board (CWB) was established in 1948 to represent the walnut growers and handlers of California. The CWB is funded by mandatory assessments of the handlers. The CWB is governed by a Federal Walnut Marketing Order. The CWB promotes usage of walnuts in the United States through publicity and educational programs. The CWB also provides funding for walnut production, food safety and post-harvest research.

  • Almond Alliance’s Elaine Trevino Nominated as US Chief Agricultural Negotiator

    On September 13th, President Biden announced his intent to nominate several individuals to serve as key economic and trade representatives, including the Elaine Trevino to serve as Chief Agricultural Negotiator at the United States Trade Representative.

    Elaine Trevino is the President of the Almond Alliance of California (AAC), a member-based trade association that advocates on regulatory and legislative issues in areas of international trade, food safety, water quality and availability, crop protection, air quality, worker safety, supply chain and feed quality. As the leader of an organization that advocates for California’s leading agricultural export, Elaine understands tariff and nontariff barriers to trade and the importance of maintaining America’s strong trade agreements and global positioning. Elaine has worked on advocating for funding for COVID-19 relief, addressing retaliatory tariffs, climate smart farming, public private partnerships for opening new markets and strengthening existing markets and addressing technical sanitary and phytosanitary barriers. Elaine works at the local and federal levels on addressing port congestion, supply chain disruptions and excessive costs.

    Elaine served as a Deputy Secretary at the California Department of Food and Agriculture for Governor Arnold Schwarzenegger and Governor Gray Davis. She was responsible for the oversight of the international export and trade programs, specialty crop block grant funding, division of marketing services, plant health and pest prevention and the statewide county fair network. Elaine serves on USDA’s Agricultural Policy Advisory Committee (APAC). Born and raised in the Central Valley of California, Elaine has a long history of community service and has a great respect for agriculture and the value of the industry to the overall economy. She received her undergraduate degree from the University of California Berkeley and attended the John F. Kennedy School of Government. Elaine and her family currently reside in Sacramento, California.

    Almond Alliance Chairman Mike Curry shared, “We are thrilled to see Elaine nominated for this position and know that her experience with us at the Almond Alliance will carry over into her new role – working first for farmers and ranchers, their families and the workers and businesses in the rural communities where we live. Her new position is responsible for conducting and overseeing international negotiations related to trade of the nation’s agricultural products – all of them including California almonds. Elaine’s nomination requires U.S. Senate confirmation (which will take time) and be assured that the Board of Directors of the Almond Alliance will lead a smooth transition in partnership with Elaine to identify and hire her successor. While we’re transitioning, the Board, Elaine and the Almond Alliance team will not skip a beat in our advocacy work on behalf of California almonds, both on the state and federal levels. Although we will miss Elaine’s leadership and energy, we are excited for the almond industry, the Central Valley (where she grew up) and California agriculture to have such a passionate and committed person serving in the Chief Agricultural Negotiator role.”

    Of Trevino, Matthew Malcolm, Editor of Pacific Nut Producer Magazine shared, “While faithfully serving the California almond industry in her role as President of the Almond Alliance of California, Elaine has also demonstrated time and time again her commitment to the greater agricultural community in her tireless efforts and involvement in addressing issues such as food supply chain disruptions, international trade disputes, securing funding for agricultural burn alternatives, and much more.  While she will be missed in her role at the Almond Alliance, we are thrilled with the opportunity she will have to represent the interests of farmers at such a critical time as this. We are confident that she will continue to do great things, as she has done for the almond industry.”

    Richard Waycott, President & CEO of the Almond Board of California concurred, “We are thrilled to see Elaine nominated for this critical position, in recognition of the importance of California agriculture and the role of specialty crops like almonds.  We’ve worked closely with Elaine and the Almond Alliance over the years in addressing global trade issues, and look forward to supporting her in her new role as chief ag negotiator.”

    Manuel Cunha President of the Nisei Farmers League added, “I believe Elaine will do a great job representing our agricultural industries. She knows the commodities and markets very well. She is bright and bold.  She understands the politics and knows how to communicate well with both farmers and legislators.”

    Of the nomination, United States Trade Representative Katherine Tai shared, “Elaine Trevino understands the importance of America’s farmers and farming communities to the vitality of our economy. Her experience will help the Biden Administration craft durable trade policy that creates broad-based prosperity. Throughout her impressive career serving in leadership positions at the state and federal level, Elaine has developed strong relationships with key stakeholders and demonstrated a keen understanding of trade and agriculture policy. If confirmed as Chief Agriculture Negotiator, Elaine would be the first woman of color and the first Latina in this critical position that will help USTR advance President Biden’s vision to increase American competitiveness. I hope the U.S. Senate can quickly confirm her to fill this important role so she can get to work on behalf of the American people.”

    Michael Dykes, D.V.M., president and CEO of the International Dairy Foods Association added, “Having had the pleasure of serving on the USDA Agricultural Policy Advisory Committee for Trade with Ms. Trevino in recent years, I’m confident she will position U.S. agriculture interests competitively, remain vigilant to protect U.S. businesses from myriad barriers to trade, and embrace diplomacy and relationship-building. As a resident Californian and former deputy secretary of the California Department of Food and Agriculture, Elaine Trevino is well aware of the importance of trade to California—the state exported $2 billion worth of dairy products in 2020— and to U.S. dairy. IDFA is eager to get to work with Ms. Trevino to continue the growth of our dairy exports and the global competitiveness of the dairy industry. We encourage the U.S. Senate to confirm her quickly.”

    “The role of Chief Agricultural Negotiator is essential in pursuing positive trade policy results for U.S. dairy farmers and in expanding overseas markets for dairy products,” said Jim Mulhern, president and CEO of National Milk Producers Federation (NMPF). “NMPF is pleased that in choosing Ms. Trevino to nominate for this position, President Biden has selected someone with the right background and clear understanding of trade’s importance to American agriculture, both of which are vital to success in this position. I’ve been fortunate to serve on the president’s Agricultural Policy Advisory Committee with Ms. Trevino and hope to see swift confirmation of her nomination by the Senate so she can commence the work that’s so key for farmers across the country.”

    “U.S. dairy farmers, exporters and manufacturers have been eagerly awaiting the nomination of a Chief Agricultural Negotiator given the sizable role that trade plays in providing a home for the equivalent of more than a day’s worth of U.S. milk production each week,” said Krysta Harden, president and CEO of US Dairy Export Council. “The world needs U.S. dairy and U.S. dairy needs the world. Our industry is eager for additional market opportunities to help us create more jobs here in America as we meet that demand with our high-quality, sustainably produced products. We urge the Senate to move swiftly to confirm Ms. Trevino and look forward to working closely with her to expand markets around the world.”

    Doug Palmer in the Politico Pro shared, “Biden has been under pressure from farm-state senators to fill the position, which Congress created 20 years ago to elevate the importance of agricultural issues in U.S. trade negotiations. Depending on the year, anywhere from 18 percent to 40 percent of the income U.S. farmers earn is derived from goods transported to other countries… By selecting Trevino, Biden helps fulfill his goal of bringing diversity into his administration, while also giving a key position to someone from the largest U.S. agricultural exporting state.”

    Palmer continued, “The Senate Finance Committee will schedule a hearing on Trevino’s nomination sometime after it has received her official paperwork from the White House. Her nomination is the last of six Senate-confirmed positions in the Office of the U.S. Trade Representative that Biden needs to fill. Of those, only U.S. Trade Representative Katherine Tai is already on the job.”

  • Losses in Over 20% of Sales due to Continued Port Congestion

    Almond Alliance of California — The transportation crisis continues for agriculture exporters and seems to be worsening as the holiday season nears. Increased costs, rescheduling, cancellations, detention and demurrage charges up 300% and lost markets are some of the realities the industry is facing. Based on numerous sources, over 20% of sales cannot be completed due to ocean carrier rates, declining to carry export cargo, unreasonable demurrage and detention charges, and other practices.  As an industry that is international holiday focused, this issue continues to be a top priority for almonds.

    The Almond Alliance continues to focus on this issue and work closely with AgTC, several stakeholder organizations, logistic companies and of course the Port of Oakland.  Here is a summary of recent efforts related to port congestion and related Almond Alliance action items.

    Federal Maritime Update (FMC):

    The FMC launched an expedited inquiry into the timing and legal sufficiency of ocean carrier practices with respect to certain surcharges. There are eight ocean carriers being asked to provide the Commission’s Bureau of Enforcement (BOE) with details about congestion or related surcharges they have implemented or announced. This action was taken in response to communications received by the Commission from multiple parties reporting that ocean carriers are improperly implementing surcharges. The companies contacted are CMA CGM, Hapag-Lloyd, HMM, Matson, MSC, OOCL, SM Line; and Zim. Each ocean carrier was identified as having recently implemented or announced congestion or related surcharges. Ocean carriers are subject to specific requirements related to tariff changes or rate increases, including providing a 30-day notice to shippers and ensuring that published tariffs are clear and definite.

    The FMC has indicated that they are committed to transparency and Chairman Maffei has said, “As Chairman, I want to know the carriers’ justifications for additional fees, and I strongly support close scrutiny by the FMC’s Bureau of Enforcement aimed at stopping any instance where these add-on fees may not fully comply with the law or regulation.”

    In summary, the FMC is working on the below items:

    • The Fact Finding 29, led by Commissioner Rebecca Dye, to identify operational solutions to cargo delivery system challenges.
    • FMC Ocean Carriers Audit Program which will analyze the top nine carriers by market share for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the United States. Other focus areas of the audit process may include practices of companies related to billing, appeals procedures, penalties assessed by the lines, and any other restrictive practices. Lucille Marvin, the Commission’s Managing Director, is leading the audit.  
    • FMC is committed to transparency facilitating ongoing stakeholder discussions and roundtables.

    The Commission can initiate enforcement actions for improperly established tariffs based on their findings. We will let you know when the inquiry on Shipping Act violation findings are released. If you want to file a formal complaint, please contact the Almond Alliance and we will walk you through the process.

    The Federal Maritime Commission recently announced their National Shipper Advisory Committee. The Committee is comprised of 24 members, evenly divided between those who export cargo from and those who import cargo to the United States, that will advise the Commission on policies relating to the competitiveness, reliability, integrity, and fairness of the international ocean freight delivery system. Joshua Woods from Blue Diamond Growers will serve on the advisory committee.  The Almond Alliance will continue to communicate industry challenges to the Commission and newly formed advisory committee.

    Action Item:  The Almond Alliance continues to engage with the FMC staff and will be transmitting a letter to the commission regarding the impacts to the California almond industry and our requests for action. In addition, we alerted the FMC that due to the delays at the Port of Los Angeles and Port of Long Beach the number of vessels that have bypassed the Port of Oakland, we believe due to time constraints, has soared. The number of vessels that have bypassed the Port of Oakland in comparison to last year is approximately 40 (from July 2020 to July 2021) which furthers the challenges that almond exporters are facing.

    Recent Roundtables Facilitated by FMC:

    Port of Oakland on August 30, 2021: Oakland Port executives, with Federal Maritime Commissioner Carl W. Bentzel, California State Transportation Agency Secretary David S. Kim, importers, exporters and stakeholders discussed the port congestion challenges and how to strengthen Oakland’s place in the global supply chain and strengthen the state and federal economies. Attendees asked for support from maritime leaders to streamline seaport operations and communications and collaborate on making the supply chain transparent for customers and operators. FMC and CalSTA asked for recommendations on how to alleviate the port congestion and improve communication between importers, exporters, the Port of Oakland, logistics and carriers.  The Almond Alliance requested longer night gate hours, requirements on the percentage of empty containers returning on a vessel, improved notifications from carriers on early calls and blank sailings, explanation of increased fee methodology and compensation for third party fees on storage and chassis. While our requests are ambitious, our goal is to push for transparency on the issues important to our exporters.

    Port of Long Beach on September 1, 2021: The Long Beach roundtable focused on supply chain transparency and how equipment and operations move cargo in and out of the largest port complex in the United States. Commissioner Bentzel was joined by Congressman Alan Lowenthal, who has represented the LA/LB port complex at the local, tate and now federal level for decades. Long Beach and Los Angeles Port Directors Mario Cordero and Gene Seroka also joined as well as representatives of rail lines, trucking, chassis, container lines, and terminals.

    Action Item:  The Almond Alliance was asked to summarize and update the impacts that the port congestions have had on almonds.  We are in the process of drafting and will submit soon.  We need to hear from our handlers if expanding night gate hours for truckers at the Port of Oakland will be helpful and utilized. Please email us and express your support. This will help our effort to expand gate hours at the Port of Oakland.

    Port Update:

    Port of Oakland: A year-long cargo surge slowed and volume dipped at the Port of Oakland in July. The Port recently reported it expected containerized cargo volume growth to resume as peak shipping season arrives. Though business dipped in July, the Port said year-to-date import volume has increased 16 percent. Total volume in the same period is up 9 percent.

    According to the Port, cargo volume declined 3.5 percent in July compared to the same month a year ago. Here’s the breakdown:

    • July containerized imports down 1.7 percent year-over-year;
    • July containerized exports down 4.7 percent Y-O-Y; and
    • July total volume, which includes imports, exports and empty container repositioning, down 3.5 percent Y-O-Y.

    The Port attributed the declines to record cargo volume in the first half of the year. It explained that surging shipments stacked up on docks causing delivery delays. The Port said that as a result, shipping lines omitted several voyages to Oakland, leading to lower volumes.

    The Port said that cargo volume should increase again from August through October. Those are peak shipping months for retailers building holiday inventories. Oakland has introduced two new vessel services to Asia in the last month which should also boost volume. The Port said new services demonstrate continued reliance on Oakland as a key global trade gateway.

    Action Item:  The Almond Alliance is working with the Port of Oakland to encourage longer hours of service at the night gate, with an early opening time. If you have an opinion on this issue, please contact the Almond Alliance.

    Union Negotiations:

    All of our almond exporters are concerned with the upcoming labor negotiations which are set to begin in January 2022. Given the existing conditions at the Port of Oakland, an impasse would be devastating.  While labor negotiations impact the Port of Oakland, the two parties negotiating are the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). The Almond Alliance is meeting with ILWU and PMA and will continue to monitor contract negotiations and update on the progress.

    Legislation of Interest:

    Congressmen John Garamendi and Dusty Johnson are authors of the Ocean Shipping Reform Act of 2021 “OSRA21”. The Act’s provisions address the unreasonable detention and demurrage charges, export cargo bookings, and other carrier practices that are essential to allow US agriculture to remain competitive in global markets. The Almond Alliance strongly support provisions in the bill to gain reasonable and fair ocean carrier practices consistent with the Federal Maritime Commission’s Interpretive Rule on Demurrage and. It imposes upon carriers the obligation to self-police compliance with that Rule. In addition, the bill obligates ocean carriers to carry export cargo, to the extent they can do so safely. It addresses carrier practices limiting efficient use of containers, chassis and other equipment. The Almond Alliance will continue to work on advancing and strengthening this bill as it proceeds through the legislative process.

    To view the Ocean Shipping Reform Act of 2021, Click Here.

    To view the Ocean Shipping Reform Act of 2021 Factsheet, Click Here.

    Action Item:  Please check the list below. If your Congressional Representative (or one that you know) is not on the list of co-sponsors of OSRA21, please contact them directly to request they co-sponsor the bill.

    A current list of Co-sponsors of OSRA21:

    Rep. Johnson, Dusty [R-SD-At Large]* 08/10/2021
    Rep. Costa, Jim [D-CA-16] 08/13/2021
    Rep. Newhouse, Dan [R-WA-4] 08/13/2021
    Rep. Smith, Adrian [R-NE-3] 08/13/2021
    Rep. Valadao, David G. [R-CA-21] 08/13/2021
    Rep. Schrier, Kim [D-WA-8] 08/13/2021
    Rep. Thompson, Glenn [R-PA-15] 08/17/2021
    Rep. Gottheimer, Josh [D-NJ-5] 08/17/2021
    Rep. Fitzpatrick, Brian K. [R-PA-1] 08/20/2021
    Rep. Brownley, Julia [D-CA-26] 08/27/2021
    Rep. Keller, Fred [R-PA-12] 08/31/2021
    Rep. Panetta, Jimmy [D-CA-20] 08/31/2021
    Rep. Baird, James R. [R-IN-4] 08/31/2021
    Rep. Van Drew, Jefferson [R-NJ-2] 08/31/2021
    Rep. Meuser, Daniel [R-PA-9] 09/03/2021
    Rep. Womack, Steve [R-AR-3] 09/10/2021
    Rep. Jacobs, Chris [R-NY-27]    09/10/2021

  • Pacific Nut Producer September Issue

    PNP921

    [btn btnlink=”https://malcolmmedia.com/order-a-back-issue/back-issue-pacific-nut-producer-magazine/” btnsize=”full” txtcolor=”#ffffff” color=”#FFF” bgcolor=”#492500″ btnnewt=”1″ nofollow=”1″]Order A Back Issue[/btn]

    [btn btnlink=”http://malcolmmedia.com/pacific-nut-producer-magazine-subscriptions/” btnsize=”full” txtcolor=”#ffffff” bgcolor=”#492500″ btnnewt=”1″ nofollow=”1″]Subscribe Free[/btn]
    [three_fifth_last]

    Contents of the September Issue:

    The Future of Harvest Automation Begins Now
    Mechanical Harvesters to Meet the Natural Frequency of Each Tree
    Oregon Hazelnut Industry Triples in Size
    Acreage Trends Support Steady Growth
    New USDA Researcher Spotlight
    Angel Acebes-Doria to Support Macadamia Nut Growers
    September Orchard Tasks
    Almonds, Hazelnuts, Pecans, Pistachios, Walnuts

    [/three_fifth_last]

  • Upcoming Legislation on Product Packaging Concerns California Farmers

    As if transportation issues and port congestion weren’t challenging enough for California agriculture and other industries, further legislation to regulate the type of packaging producers can use to ship their products is pending state approval. Watch this brief video with Almond Alliance of California’s lobbyist Dennis Albiani how this will impact agriculture, and read more about it in Pacific Nut Producer Magazine.
    Please thank this video’s sponsor Suterra for their industry support.

  • US Pistachio Shipments Up Despite Logistical & Economic Challenges

    Despite continued pandemic, trade and logistical issues, American Pistachio Growers President Richard Matoian shared at their annual Summer Luncheon that pistachio shipments are up, which is critical for the success of this growing commodity. Watch this brief interview with Richard as he explains, and read more about it in Pacific Nut Producer Magazine.
    Please thank this video’s sponsor Suterra for their industry support.

  • Ag Goals & Progress of Voluntary Agreements for Bay-Delta Flows

    What is now being referred to as a 20 year drought in California has caused many problems for not only farmers, but all Californians and wildlife. In addition to the dire need for water infrastructure renovations, farming groups are also very focused on pursuing voluntary agreements for alternatives to the California State Water Resources Control Board plan for Bay-Delta flows.  Watch this brief interview with Merced County farmer, Randy Fiorini who shared some insights from the Delta Stewardship Council as the discussions on voluntary agreements have resumed.
    Please thank this video’s sponsor Suterra for their industry support.

  • FARM Act Funding for Pilot Programs to Produce Biocarbon Products from Tree Nuts

    The Almond Alliance of California today commended Rep. Josh Harder (C-10) for including funding to support ten nationwide pilot programs to convert tree nut by-products into biocarbon products in the Future of Agricultural Resiliency and Modernization (FARM) Act.

    Almond Alliance President Elaine Trevino explained that in California the funding will help accelerate efforts to develop new biofuels or other biocarbon products derived from almond harvest by-products.  For example, in a process called “pyrolysis” almond harvest by-products can produce biochar, a soil amendment with excellent carbon sequestration potential and syngas and bio-oils, which can be used directly to fire furnaces or more importantly as inputs to produce motor vehicle biofuels and other biochemicals.

    Trevino commented, “California’s almond growers are proud to be innovators who remain focused on sustainability and are constantly looking to put everything we grow to its highest and best use.  We expect that biofuels produced using California Grown almond by-products will become a major contributor towards meeting California’s carbon neutral goals.  We appreciate Congressman Harder’s ongoing support of almond growers and especially his inclusion of funding for pilot projects in the FARM Act that will catalyze development of climate-friendly biocarbon and biofuel products.”

    About the Almond Alliance

    The Almond Alliance of California (AAC) is a trusted non-profit organization dedicated to advocating on behalf of the California almond community. California almonds generate more than $21 billion in economic revenue and directly contribute more than $11 billion to the state’s total economy. California’s top agricultural export, almonds create approximately 104,000 jobs statewide, over 97,000 in the Central Valley, which suffers from chronic unemployment. The AAC is dedicated to educating state legislators, policy makers and regulatory officials about the California almond community. As a membership-based organization, our members include almond processors, hullers/shellers, growers and allied businesses. Through workshops, newsletters, conferences, social media and personal meetings, AAC works to raise awareness, knowledge and provide a better understanding about the scope, size, value and sustainability of the California almond community.

    For more information on the Almond Alliance, visit https://almondalliance.org/ or check out the Almond Alliance on Facebook, Twitter and Instagram.