Blue Diamond Growers has named Dean LaVallee as the new Chief Operating Officer (COO) for California’s largest almond cooperative. In addition to serving as COO, LaVallee will continue to operate in his current role as Chief Financial Officer (CFO) and will report directly to Blue Diamond Growers’ President and Chief Executive Officer, Mark Jansen. As COO/CFO, LaVallee will oversee the Finance, Global Ingredients, and IT divisions within Blue Diamond Growers. He joined the cooperative in 2011.
“We are so pleased to expand Dean’s responsibilities to include that of Chief Operating Officer,” said
Jansen. “His strategic and proven leadership over the last decade within our organization has established a crucial foundation for Blue Diamond’s success in ensuring maximum returns to our grower-owners. In his new role, Dean will bring together the needed infrastructure, technology and resources for our continued growth and prosperity.”
In other leadership news from the cooperative, long-time Blue Diamond Growers’ employee, Bill Morecraft, has announced his retirement at the end of this year after 35 years of service. Morecraft joined Blue Diamond Growers in 1986 working in Finance, Production Planning, and Sales Planning. He assumed leadership of the Global Ingredients Division in 2008 where he is credited with streamlining the product line, introducing a focus on value-added ingredients, and developing a close relationship with Blue Diamond’s Operations Team to increase profitability. Blue Diamond now processes and ships premium almond products to more than 90 countries.
Effective September 1, Laura Gerhard was promoted to Vice President to assume leadership responsibilities for Blue Diamond’s Global Ingredients Division. Gerhard will lead day-to-day operations of the division, which supplies almond ingredients for processed and prepared food manufacturers, as well as for bulk purchase, around the world. She will also oversee the commercial success of the division’s global product portfolio, which includes a growing array of almond-based ingredients, such as almond protein powder, almond flour, and almond butter. Gerhard began her career with Blue Diamond Growers in 2017 as Director, Strategy and Planning with Global Ingredients. She added responsibility for Global Ingredient Division Marketing in 2020.
“It is leaders such as Bill who have helped to make Blue Diamond Growers the global leader in almonds that it is today,” said Jansen. “All of us at Blue Diamond sincerely thank Bill for his hard work, dedication, and numerous contributions over the years and wish him the best in his well-deserved retirement. I also want to congratulate Laura on her promotion. I have great trust in her leadership. Laura has been instrumental to our success in the Global Ingredients Division, where she has helped drive business growth, develop a strong team, and organize our business and strategic planning. I’m confident Bill, Laura, and their team will work closely to ensure a seamless transition for our customers.”
India recorded significant growth in almond, walnut, and pistachio imports in market year (MY) 2020/2021, increasing by 44, 20, and 34 percent, respectively, from MY 2019/2020. However, MY 2021/2022 almond and walnut imports are estimated to drop due to high domestic prices, increased domestic supply, reduced production in the United States, geopolitical tensions in regional suppliers (including Afghanistan), and various global shipping challenges. Conversely, India’s pistachio imports are estimated to rise 11 percent to 31,000 metric tons (MT). The domestic market for pistachios remains marginal, albeit with promising growth prospects and imports are estimated to reach 50,000 MT by MY 2024/2025. 
PRODUCTION:
FAS New Delhi (Post) forecasts India’s market year (MY) 2021/2022 (August-July) almond production at 4,500 metric tons (MT) (kernel-weight basis), unchanged from last year’s estimate. Almond production is concentrated in India’s Union Territory of Jammu and Kashmir and in Himachal Pradesh state. Popular varietals grown include Shalimar, Makdoon, Waris, and Kagazi. Kashmir’s local horticultural department promotes the production of the Kagazi (thin-shell) variety due to its higher yield and late blooming characteristics. Shelling rates range between 20 and 30 percent for hard-shell varieties, and 40 percent for thin-shelled varieties.
The Jammu and Kashmir territorial government, through its Almond Development program, aims to increase the region’s almond cultivated area by upwards of 12,000 hectares and phase-in new higher yielding cultivars. However, as of 2021, only one almond nursery is currently under development, and located in the Shopian district.
CONSUMPTION:
FAS New Delhi forecasts MY 2021/2022 Indian almond consumption at 135,000 MT, 10 percent below the current year estimate. The MY 2020/2021 consumption numbers, however, have been revised upward to 150,000 MT reflecting stronger local demand. An abnormal drop in international prices led to atypical demand growth. While domestic consumption increased an astronomical 31 percent between MY 2019/2020 and MY 2020/2021, India will likely see a demand correction in the upcoming market year, owing to higher domestic prices a result of reduced production in California. Global shipping constraints, including delays, transit congestions, and container shortages will also have an adverse impact.
India’s almond demand nevertheless is still expected to remain high, with the domestic economy’s recovery coupled with consumer spending increases following in the wake of the COVID-19 second wave. Almond consumption in India’s hotel, restaurant, and institutional sector (HRI) is seen as increasing, which will offset a bit of the drop in retail demand. A return to traditional consumer activities, including outdoor events, weddings, and festive ceremonies, as well as dining out will further propel almond consumption in both the current market and forecast years. Almond sales through the end of 2021 are expected to remain strong in anticipation of this year’s festive season. Bulk sales, associated with business and corporate gift giving, are likely to regain their footing.
Almonds’ nutritional benefits, with their “immunity building characteristics,” have been widely touted during India’s COVID-19 second wave. This has inadvertently led to fundamental changes in consumer behavior, which will likely endure at a minimum in the near- to medium-term.
The role of eCommerce, coupled to hyperlocal grocery delivery companies (i.e., Amazon, Big Basket, Flipkart, and Nature’s Basket), continue to stimulate almond consumption. Additionally, an evolving supply chain, with the growing consumer awareness of perceived health benefits, will drive almond consumption in the food processing, personal care, and Ayurveda industries. The increased use of almonds in breakfast cereal bars, snack foods, flavored dairy products, processed beverages, and confectionaries will help further demand growth.
PRICES:
Market year 2020/2021 saw initial high demand, thanks to the combination of lower sales prices and shipping delays. Beginning in August 2020, shelled almond prices were 20 percent lower ($759/MT) compared to the same period last year ($944/MT). By October 2020, supplies tightened over delayed shipments. However, domestic prices stabilized following a deluge of delayed shipments arriving almost simultaneously – a tidal wave of almonds hitting India’s shores.
Strong demand at the onset of the season helped many businesses reduce their liquidity, recovering from COVID-19 induced losses incurred in March-June 2020. With relatively slowing demand and lower supplies, prices dipped between seven to 10 percent from November 2020 onward (figure 1). 
In March 2021, almond prices again rose as the COVID-19 second wave led to renewed nationwide lockdowns. The second wave undermined almond sales, weaking demand for the season’s new California-origin crop. Prices commenced an upward march, climbing 26 percent between May-July 2021. By August prices spike, hitting the $1,194/MT (India rupees (INR) 87,300/MT) mark for shelled almonds and $845/MT (INR 61,800/MT) for in-shell. Indian buyers are now waiting on the September shipments anticipating a new price correction.
Industry sources are already reporting somewhat smaller kernel sizes in the initial shipments, but the expectation is that almond quality should improve with successive consignments. Market sentiment is expected to improve from October 2021 onwards as shipment transits and delays better.
TRADE:
FAS New Delhi forecasts India’s MY 2021/2022 almond imports at 125,000 MT, 18 percent below the MY 2020/2021 estimates. Post is revising the MY 2020/2021 import figures upward to 152,500 MT based on new trade estimates. Between August 2020 and May 2021, almond imports soared by 61 percent.
U.S.-origin almonds account for 87 percent of India’s total import volume in MY 2020/2021, followed by Australian almonds in a distant second place with seven percent market share (table 2). Almond imports from the United States and Australia are typically in-shell, of the nonpareil or Carmel varieties, and are shelled locally (i.e., machine-cracked and hand sorted). Most other origins supply primarily shelled almonds. Packaged almonds account for about 10-12 percent of retail sales.
Global shipping challenges including port delays and congestions, longer transit times, and container shortages are decimating Indian importers’ stocks. In some instances, consignment delays (some over a month), are impacting Indian buyers’ cash flows and the product’s market availability. These shipping challenges are likely to continue in the upcoming market year.
India’s almond exports, at 200 MT in MY 2021/2022 are negligible. Exports in the 2020/2021 included shipments to the United Arab Emirates (UAE), Sri Lanka, and the United Kingdom (UK) (table 3).
POLICY:
India does not set quantitative restrictions on almond imports. U.S.-origin almonds face retaliatory tariffs of $0.56 per kilogram (kg) (INR 41/kg) for in-shell and $1.64 per kg (INR 120/kilogram) for shelled.
India’s non-tariff barriers include narrow almond kernel standards prescribed by the Food Safety and Standards Authority of India (FSSAI). Industry sources indicate that the almond kernels standards are too restrictive to be widely applied across multiple commercial grades. Proposed quality/grade factors pertain to commercial contracts, these should not form the basis for import or retail controls.
Traders sustain that there is a need for flexibility in grades to account for varying commercial situations, including varietal differences, crop quality variability, and pricing differentials, as opposed to physical parameters such as damage and the presence of foreign material.
PRODUCTION:
FAS New Delhi forecasts India’s MY 2021/2022 (September-August) walnut production at 36,000 MT (in-shell basis), up three percent over last year. Indian walnut production is cyclical, and yields can vary by almost 20 percent depending on weather conditions at the time of blossom and harvest.
Walnuts are grown as a plantation crop in the northwestern Himalayan belt, extending through India’s northeastern region. Production is concentrated to Jammu and Kashmir. Popular varieties include Lake English, Drainovsky, Opex Caulchry, which combined account for 90 percent of the overall production area. However, Himachal Pradesh (Gobind, Eureka, Placentia, Wilson); Uttarakhand (Chakrata varietals); and the northeastern states of Sikkim and Arunachal Pradesh do contribute limited volumes.
India’s walnuts come in various sizes and with varying characteristics. These are sorted into paper- shelled, thin-shelled, medium-shelled, and hard-shelled categories. The walnut harvest typically occurs from late August through September. In 2021, the Kashmiri government established three walnut nurseries which produced around 20,000 walnut seedlings for propagation (see, Kashmir Reader).
India’s walnut production lacks advanced horticultural practices that are often found in other walnut growing countries. India does not engage in high-density planting, improved orchard management practices, stable yields, faster fruiting periods, nor has access to modern post-harvest infrastructure facilities. In Jammu and Kashmir, India’s primary production area, walnut trees are largely cultivated in an unorganized manner. Most of the trees are 40 years old; requiring a 15-year gestation period.
Harvesting walnuts remains labor intensive. The COVID-19 national lockdown measures exacerbated labor costs, with many migrant workers forced to return to their home states. Sources indicate that higher yielding varietals, using high-quality grafted plants, are needed to increase domestic production.
CONSUMPTION:
FAS New Delhi forecasts MY 2021/2022 Indian walnut consumption to remain flat at 66,000 metric tons. Post is revising India’s MY 2020/2021 consumption to 66,000 MT, some 6,000 MT above the previous estimate. Indian consumers demand walnuts due to the nut’s perceived health benefits and improved packaging (i.e., vacuum-packed bags) that supports year-round consumption. Much like with almonds, traditional and modern retail stores along with eCommerce is spurring on greater consumer demand. Walnuts remain popular with consumers, who perceive the nut having significant health benefits (e.g., cholesterol reducer, diabetes risk abatement, and improved brain function). Walnut kernels are rich in proteins, healthy fats, minerals, and vitamin-B.
About 70-75 percent of Indian walnuts are utilized domestically, with more than half of consumption occurring during the festive (October-November) months and winter season. Industry sources estimate that 17 percent of walnuts are used in food processing, with an additional four percent utilized in the personal care industry. The HRI sector uses walnuts as a key food ingredient, including in bakeries and the manufacture of traditional Indian sweets.
PRICES:
The MY 2020/2021 domestic walnut season kicked off with excellent demand and high prices. By December 2020, a price correction occurs as U.S.- and Chilean-origin imports make their landfall. Sources report quality concerns with imported products – specifically less desirable darker colored walnuts from California. While traders hold that color does not affect product quality, Indian consumers favor lighter-colored walnut kernels. Domestic prices witnessed a drop in February 2021, as a result slower demand and market oversupply. Demand started recovering in May along with prices (figure 2).
Prices will likely stay high for most of MY 2021/2022. Lower production coming from California, along with uncertainty with what will happen next with Afghanistan’s trade in the near-term following the Taliban’s seizure of the state, will keep prices elevated. Domestic average prices as of August 31, 2021, are $1,084/MT (INR 79,200/MT) for shelled walnuts and $692/MT (INR 50,600/MT) for in-shell.
TRADE:
FAS New Delhi forecasts MY 2021/22 Indian walnut imports at 34,000 MT, six percent below the MY 2020/2021 figure. This decline is anticipated as both high domestic prices and trade uncertainty from Afghanistan, the fifth largest exporter of walnuts to India in MY 2020/2021, are likely to reduce consumption. Post is revising its import estimates for MY 2019/2020 to 30,000 MT and MY 2020/2021 to 36,000 MT based on the latest trade data. From September 2020 to May 2021, the United States remained India’s main supplier with 55 percent market share, followed by Chile with 26 percent.
India is primarily an in-shell walnut market. Sources indicate that India’s in-shell walnut imports grew 83 percent in September 2020-May 2021 (table 6), while shelled walnut imports declined by 25 percent. 
FAS New Delhi forecasts MY 2020/2021 Indian walnuts exports at 4,200 MT, up 11 percent from the previous market year. Post is revising its export estimate for MY 2019/2020 to 3,000 MT and MY 2020/2021 to 3,800 MT based on the latest trade data. In MY 2020/2021, India increased walnut export volumes to its traditional markets in the UAE, UK, Saudi Arabia, and Germany (table 7).
Over 95 percent of India’s walnut exports are shelled kernels in vacuum packs, with 35-40 percent classified as “light halves,” 35-40 percent “amber halves/light broken,” and the remaining balance as “amber halves.” Market sources report that Indian walnuts are competitively priced against those of the United States, Chile, Turkey, and China.
POLICY:
India’s Open General License program permits walnut imports without quantitative restrictions. Both in-shell and shelled walnut imports are subject to a 100 percent tariff (effective February 2020). India is applying a retaliatory tariff on U.S.-origin in-shell walnuts at 20 percent above the applied BCD of 100 percent. However, California walnuts exports remain strong due to high consumer demand.
On July 30, 2021, the FSSAI published the Food Safety and Standards (Food Product Standards and Food Additives) Third Amendment Regulations (2021) which cites the final standards for walnut kernels with an implementation date of February 1, 2022 (see, GAIN-INDIA – IN2021-0097 India’s FSSAI Issues Final Standards Walnut Kernels and Other Various Food Products). India’s walnut kernel standards apply to fresh products and includes a 15 percent permissible variation for color uniformity. The FSSAI also changed the damage limit from two to four percent based on the number of damaged units, using a percent-by-mass parameter.
PRODUCTION:
There is no commercial production of pistachios in India. Limited, unorganized production is confined to the Union Territory of Jammu and Kashmir.
CONSUMPTION:
FAS New Delhi forecasts India’s MY 2021/2022 (September-August) pistachio consumption at 30,900 MT, 11 percent above the current year estimate. India is traditionally a market for in-shell pistachios, with peak demand occurring from October through February. While there is some nominal demand throughout the year, sales typically increase during the Indian festive and wedding seasons. Pistachios are typically sold through retail and wholesale channels. Organized retail outlets, along with online stores, have also increased their market presence to cater to growing pistachio demand. Sources indicate that India’s market for pistachios may reach 50,000 MT by MY 2024/2025.
The Indian consumer traditionally has preferred Iran- and Afghanistan-origin pistachios. This preference derives from consumers’ familiarity with the taste, texture, color, and shape of the tree nut. Conversely, U.S.-origin pistachios are relatively different in taste, have a distinct greenish tint, and are larger in size with a different texture. Popular Iranian varieties include Akbari, Kalleh, Fandoghi and Ahmad Aghaei, while California’s U.S. grade 21-25 No. 1 pistachios is the preferred American variety.
Pistachios from Iran and Afghanistan have tapped successfully into the largely unorganized Indian traditional sweets (mithai) sector primarily due to cheaper pricing despite inconsistent product quality (i.e., broken/chipped kernels). The traditional Indian sweets market readily absorbs lower quality pistachios as a food ingredient.6 California pistachios command a premium due to consistent quality, size, and shape. The consumption of pistachios as a snacking nut is limited to affluent consumers, or about two-to-three percent of India’s population.7 Preferential pricing and mass-marketing activities can help build consumer awareness and demand for higher quality California pistachios.
PRICE:
During MY 2020/2021, domestic prices for in-shell pistachios ranged between $9.50 to $14.00/ kg (INR 700 to 1,000/kg), and shelled pistachios $14.00 to $22.00/kg (INR 1,000 to 1,600/kg). Higher quality California pistachios retail between $10.50 to $12.00/kg. The first half of MY 2020/2021 was difficult for Indian buyers, as they struggled with excessive inventories at the onset of the season due to the national COVID lockdown measures of March-June 2020. The situation this market year has improved, due to stabilized supply chains and pricing. Typically, profit margins for pistachios range between three to five percent for importers.
TRADE:
FAS New Delhi forecasts India’s MY 2021/2022 pistachio imports at 31,000 MT, 11 percent above MY 2020/2021. From September 2020 to May 2021, the UAE was the largest supplier of pistachios to India, followed by Afghanistan, the United States, and Hong Kong (table 10). Neither the UAE, nor Hong Kong produce pistachios, and are instead transshipping products from other origins, primarily from the United States. Historically, the United States, Iran, Afghanistan, and Turkey have been the largest suppliers of pistachios to India (figure 3).
Shipment transit delays have been affecting Indian pistachio importers. According to sources, some importers continue to await pistachio containers that were intended to arrive in June 2021. Indian exports of pistachios for MY 2021/2022 are forecasted at 100 MT and will continue to remain negligible for the foreseeable future (table 11).
India levies a 10 percent BCD on raw pistachios (in-shell and shelled), and 30 percent on roasted pistachios. Additionally, a Goods and Services Tax of 12 percent is applied on the customs and freight value, along with a Social Welfare Surcharge of 10 percent of the customs duty. — By Ankit Chandra, Mark Rosmann & Mariano Beillard, USDA Foreign Agricultural Service
It is an “off–year” for pistachios in Turkey, and consequently, the USDA Foreign Agricultural Service forecasts a low production level for MY 2021/22. However, Turkey has carried over significant stocks from the previous year, so there is no shortage of pistachios in the market. In addition, Turkey relies on imports of almonds and walnuts to meet domestic demand for tree nuts. U.S. walnuts and almonds are still subject to retaliatory tariffs, resulting in a 10 percent higher customs tax than other tree nut-exporting countries. Turkey is the top producer of hazelnuts in the world and the largest exporter. The MY 2021/22 yield for hazelnuts is higher than last year because of good weather conditions.
I. PISTACHIOS
a. PRODUCTION
Pistachio production is cyclical in Turkey. There are “on–years” during which harvests are significantly larger than during “off–years.” Therefore, yields can vary dramatically from year to year and also between regions and orchards in Turkey.
Post estimates Turkey’s pistachio production to be 87,000 MT for MY 2021/22. MY 2021/22 is an off– year and the yields are not expected to be very good. Pistachios are grown mostly without irrigation in Turkey. Therefore, spring rains are important for the orchards. The drought that affected the Southeast part of Turkey during the spring and summer has caused pistachio yields to be extraordinarily low this year. Market sources report that the lack of rain caused the fruits to be smaller and fewer and some branches of the trees have died from the lack of the water. A disease called phytoplasma also affected pistachio trees, which market sources think was due to the drought that caused trees to become weak. In addition, some of the nests for next season’s (MY 2022/23) pistachios that would have normally started to form this summer have died and dropped off the trees because of the drought. Consequently, this year’s production is low (even for an-off year) and farmers anticipate that the following MY (2022/23) will also be affected by this drought. The lost branches and nests this season will cause yield decreases in MY 2022/23, even though it should be an on-year.
There are an estimated 54 million bearing trees and about 22 million non-bearing trees in Turkey, according to the Turkish Statistical Institute (TurkStat) as of the beginning of MY 2021/22. Bearing trees increased 4.7 percent compared to the previous marketing year and non-bearing trees increased about 8.2 percent. This increase in the number of bearing trees explains the increase in production compared to earlier off- years. Although MY 2021/22 is a low yield off-year, production is still higher than many of the earlier off-years. Also, younger bearing trees are known to be more productive than older ones. Southeast Turkey is known to have many trees over 50 years old, so increasing the number of younger trees is expected to increase the yield. In addition, farmers are now better trained to understand the importance of male trees as they were seen as almost redundant a generation ago and not widely planted. Market sources indicate that farmers have stopped planting lentils and barley (even wheat in some cases) in order to plant pistachio trees in lands that cannot be irrigated. Many farmers believe they can make more money on pistachios.
Currently, the average pistachio yield is around four kilograms (kg) per tree in on-years and two kg per tree in off-years. MY 2020/21 was especially a good yield on-year with a yield of over four and a half kg per tree. The southeastern part of Turkey is the traditional production area for pistachios. The provinces in this region (Gaziantep, Sanliurfa, Adiyaman, Siirt, Kilis, Kahramanmaras, Mardin, and Diyarbakir) are the most significant locations for commercial pistachio production and represent 95 percent of the total production, with around 80 percent coming from Gaziantep and Sanliurfa provinces. The remaining five percent of the pistachio production is in the Aegean, Mediterranean, and Marmara regions. Around 56 out of 81 provinces in Turkey produce pistachios, according to the Gaziantep Commodity Exchange (GCE). During the last decade, production in regions outside of Southeastern Anatolia has also increased.
There are two main types of pistachios grown in Turkey, which are both unique to Turkey and different from the Iranian and Californian pistachio varieties. Most Turkish pistachios are the Gaziantep (Antep) variety, which are thinner and smaller than the typical Iranian variety. The Siirt variety accounts for about 15 percent of total production. It is a high yielding variety with less production fluctuation than the Gaziantep variety. The size and shape of Siirt nuts are in between the Gaziantep and Iranian pistachios. Quality is directly related to size in Turkey: 90 nuts or fewer per 100 grams is considered first quality, 90-100 nuts are second quality, 100-120 nuts are third quality, and more than 120 nuts are fourth quality. With the increasing number of new saplings planted in the Sanliurfa and Siirt regions, the production of high-quality pistachios is predicted to increase in the future.
In recent years, to mitigate the natural “off year/on year” production cycle, producers and traders have been expanding implementation of good agricultural practices, especially in parts of Southeastern Anatolia. Pistachios are mostly grown in dry conditions, as irrigation for pistachios is not common in Turkey. The common perception about pistachio trees is that they can grow naturally in marginal soil and conditions. While this may be correct, yields have proven to be much better with “good” soil conditions, sufficient maintenance, and irrigation. More orchards are being irrigated to protect against the abnormal drought conditions in recent years. Research activities have been conducted by the universities located in the Southeastern and Eastern Anatolia Regions to develop better production methods and plant protection measures for pistachio orchards. However, the “off year/on year” production cycle still plays a prominent role in the amount of pistachio production.
Since 2011, The Turkish Foundation for Combating Soil Erosion, Forestation, and Protection of Natural Habitats (TEMA), with contributions from private companies, has undertaken a project to increase the yield of pistachios in Gaziantep and Sanliurfa provinces. The “May you have abundant pistachios” project trains the pistachio farmers about how to maintain the trees, which contributes to a significantly higher yield. Education about pruning and trimming techniques and training about using pesticides and fertilizers improved the orchards of the farmers who were trained, tripling yields and even producing fruit from about 1/3 of newly planted saplings.
b. CONSUMPTION
MY 2021/22 consumption is forecasted as 130,000 MT. Market sources indicate that there are still stocks in warehouses carried from the last marketing year because of the excellent harvest in the previous year. In addition, according to market sources the retail price of the pistachios has not increased much compared to the previous year. These factors should help make up for the low production this year, and thus consumption should be at normal levels.
Pistachio prices currently remain relatively stable as the new harvest of MY 2021/22 starts, despite the off-year harvest and the overall food inflation in Turkey. The price of bulk shelled early harvest pistachios (generally used for baklava and other traditional desserts) is about 160 – 165 TL/kg (~19.13 – 19.73 USD/kg) as of August 2021: this represents a 10 to 15 percent annual increase in prices in terms of TL and about the same amount in U.S. dollars. Pistachio farmers are disappointed in these prices as fertilizer prices have increased about 100 percent and pesticide prices have increased about 70 percent. Consequently, farmers indicate that the cost of producing pistachios increased about 80 percent this year. This will cause some pistachio producers/traders to sell as slow as possible and keep stocks in the hope that prices might go up in following months or the next marketing year.
Current retail prices of in-shell pistachios for snacking in Istanbul are between 107 to 160 TL/kg (~12.80 – 19.13 USD/kg) as of August 2021, depending on the retailer and location. TL retail prices have remained about the same as last year (see our Retail Food Report for more information on economic conditions). Pistachio prices vary depending on where and how the pistachios are bought (i.e., in bulk or small packages in convenience stores or specialty markets).
Most of Turkey’s pistachio crop is consumed domestically and consumption varies from year to year, according to availability of pistachios in the market. Traditionally, Turkish people consume 35 percent of total domestic consumption as a snacking nut and the rest is used in the production of confectionery products, especially in traditional desserts and bakery products like baklava. During the last decade or so, the use of pistachios in chocolate making and ice cream has increased as well.
Packaging of tree nuts, including pistachios, has doubled over the last few years throughout the country, especially in the coastal regions (Aegean, Mediterranean and Marmara). Purchasing of pre-packaged nuts from supermarkets is becoming more popular in larger cities as opposed to buying them in bulk from nut stores, as is the traditional sales method in Turkey. Post observes that this change of consumer behavior is increasing throughout the country as the availability of discount market chains all over Turkey also increases. Please refer to our Retail Food Report for more information. Currently, 35 percent of total production is being packaged. The increased amount of nut packaging, versus selling in bulk, will have a positive influence on per capita consumption over time. Current per capita consumption is around 1.5 kg/year in Turkey.
c. TRADE
Turkey generally consumes most of its domestic pistachio production, and a minor amount of total production is exported. Some production is stored to plan for an upcoming off-year if it is an on-year. We see that more pistachios have been exported recently compared to previous years, as the harvest was a record high in MY 2020/21 and the Turkish lira lost a lot of value, making Turkish pistachios relatively cheap in international markets. As MY 2020/21 was a record high yield on-year, Turkey exported a record level of 35,000 MT pistachios, mostly shelled. Important export destinations were Italy, Germany, Israel, Saudi Arabia and Morocco.
Although MY 2021/22 is expected to be an off-year with a lower-than-average yield there will still be some exports. The carried over stocks from the record high yield MY 2020/21 and the weakening of the TL should contribute to additional exports from Turkey. Post forecasts a relatively high level of exports for an off-year at 17,000 MT for MY 2021/22.
Pistachios can normally be imported to Turkey at a 43.2 percent tariff rate. However, the Turkish government implemented a 20 percent additional tariff from the summer 2018 until spring 2019 for U.S.-originated pistachios due to the implementation of additional steel tariffs on Turkish exports to the United States. On May 17 2019, the additional tariffs on nuts were halved (reduced to 10 percent). The total tariff rate on pistachios from the United States to Turkey is now 53.2 percent, compared to 43.2 percent for all other countries.
As the trade prices of alternative products such as walnuts and almonds are also tied to the U.S. dollar when importing, Turkey will continue importing some pistachios, especially from Iran as they expect a good off-year this season. Post estimates that the imports for MY 2021/22 will be 15,000 MT.
d. STOCKS
As discussed earlier in the report, MY 2021/22 was a record high harvest year with higher than average yields. However, pistachios were not consumed as much in Turkey due to the pandemic since restaurants, cafes and patisseries that would serve baklavas and similar traditional pistachio-based desserts were closed for a good amount of time during the winter 2021. This means that record high stocks are being carried over to MY 2021/22. The stock for MY 2020/21 is now estimated at 65,000 MT, in line with market expectations. We also forecast that year-end stocks for MY 2021/22 will be 20,000 MT, exceptionally high for an off-year.
Pistachio stocks vary considerably from year to year in line with cyclical production. Moreover, pistachio production, trade, and stock statistics are not maintained by the Government of Turkey (GoT), nor related associations in the sector. According to tree nut producers, better data would help prevent price fluctuations, especially in low production years, as fluctuations have a negative impact on consumption and food industry usage. For these reasons, the GCE has taken steps to increase the trade and storage of the commodity under safe conditions after harvest. The GCE received a GoT grant to establish a 10,000 MT capacity licensed warehouse in Gaziantep. Scientists from various universities are supporting improvement of storage conditions since the cyclical nature of pistachio production in Turkey elevates the importance of stocks. Good storage conditions also minimize food safety concerns such as aflatoxin. The GCE aims to prevent price fluctuations using the licensed warehouse system so producers, consumers, and traders will all benefit. They also aim for transparency in stock numbers, using this warehouse system to improve the supply-demand pricing mechanism. This licensed warehouse is a good start but not sufficient for Turkey’s storage needs or to create market transparency. The licensed warehouse opened and started accepting pistachios for storage in June 2021, after more than a year delay. There is also a laboratory working with the licensed warehouse to assess the quality of the pistachio stocks.
e. POLICY
The GoT does not provide direct supports specifically to pistachio farmers but supports the pistachio farmers with the general agriculture subsidies if they are registered in the Farmers Registration System. Supports are announced by the GoT in the beginning of each calendar year.
The GoT offered farmers the following support for the year 2021. Most of the following has not been changed from last year, although the TL has depreciated, so in terms of U.S. dollars the support has decreased compared to previous marketing year. Only fuel and fertilizer and good agricultural practices supports have been increased compared to last marketing year. Note that a decare (da) is equivalent to 0.1 hectares.
100 TL/da (11.96 USD2/da) and 400TL/da (47.84 USD/da) respectively for the establishment of orchards that are planted with standard seedlings and certified seedlings
50 TL to 100 TL /da (5.98 USD/da to 11.96 USD/da) for organic agriculture;
40 TL/da (4.78 USD/da) for Good Agricultural Practices;
23 TL/da (2.75 USD/da) for fuel and fertilizer.
II. ALMONDS
a. PRODUCTION
Almond production in Turkey is forecast to increase to 18,000 MT in MY 2021/22, up from 16,500 MT in MY 2010/21. An increased number of bearing trees accounts for this increase.
Very similar to last the last marketing year, the almond trees started to bloom in the second half of January this year, instead of the usual mid-February, due to warm weather in Datca Peninsula, the region of the earliest production in Turkey. Although Datca Peninsula is famous for its almonds among Turkish consumers, the amount of almonds harvested from the region is minor in the overall almond production of Turkey. According to market sources, in a good year the Datca Peninsula only produces 1,500 MT. This year’s harvest in the region is expected as normal.
Producers from the Adiyaman province, the largest growing area in Turkey for almonds, report that despite challenges such as heavy rains and draught earlier in the season, a good harvest is expected for MY 2021/22. Several other smaller production areas in the Southeastern Anatolia Region, such as Mardin and Batman, will also have regular levels of harvest despite the drought conditions in the Southeast of Turkey.
The rest of the Aegean and Mediterranean regions, such as Antalya, Mersin, Manisa and Mugla, have also had a good year, in line with long term averages. Warm weather came at the right time, contributing to a good harvest. There are also almond orchards in the province of Manisa, where the climate is very suitable for cultivating almond trees. The market for domestically produced almonds is usually strong, and new orchards have been established to meet the demand.
As in previous years, the Adiyaman and Kahta Chambers of Agriculture are asking for higher purchasing prices to be set by the Agricultural Credit Cooperative Union (ACCU) for the 2021/22 harvest. The costs of inputs such as fertilizer and herbicides, and labor costs have increased from last year due to the depreciation of the Turkish lira and inflation. The price offered by the ACCU affects the prices offered by commercial buyers, effectively setting a limit to the price. The two chambers report that these low prices would discourage farmers from continuing to grow almonds or at least enlarging orchards.
Although almonds are grown in most parts of the country, they typically have been considered a minor crop and are not widely cultivated commercially in Turkey. Despite the increase in the number of planted almond trees as a result of special afforestation projects administered by Ministry of Agriculture and Forestry (MinAF) in years, almond production has not increased significantly, likely because the trees are planted in less-than-ideal conditions and are not carefully tended. In fact, these projects have contributed to increasing forests but not much on increasing almond production.
The GoT also encourages producers to establish new orchards by allocating free land for 49 years, providing some interest-free financial support, and financially supporting farmers registered in the “Farmers Registration System” for using certified seedlings in these orchards.
As a result of these incentives and government support, the establishment of almond orchards has become popular in Turkey and the private sector has concentrated on establishing new almond orchards for commercial production in Izmir, Manisa, Mugla, Denizli, Sanliurfa, Canakkale, Adiyaman and Karaman Provinces. In 2020, MinAF published a guide booklet for investment in almond orchards (the study was removed from the website after a year of distribution, likely due to changing costs). The study takes a sample 100 hectares (ha) orchard establishment, presents the financial analysis (net present value analysis), and explains technical details of establishing an almond orchard giving information on different steps. Commentators say that it will be helpful, although the facts in the rural areas could be a bit different than this desktop study. The guide reports the investment as profitable, a return on investment in seven years. It is believed that these initiatives will increase the production of almonds in the future.
The district of Kahta within Adiyaman Province has been the leader in almond production in Turkey since 2016, according to the Kahta Union of Hard Shelled Fruit Producers. The expectation for the province is to have 100,000 ha of almond orchards by 2023/24, with the goal of producing enough almonds to meet domestic demand in Turkey. Kahta Chamber of Agriculture reports that as of 2021/22 MY they now have 74,000 he of almond orchards (not all bearing) in the district. To assist with this goal, the GoT established the Adiyaman Hard Shelled Fruits Research Institute in 2017 which will work in cooperation with the University of Adiyaman. An almond and pistachio processing facility has also been established by the Agricultural Credit Cooperative Union with the support of the GoT and opened in the spring of 2018. In September 2019, the ‘1st Adiyaman Almond Summit’ was organized by the Adiyaman Agriculture and Forestry Directorate and Ipekyolu Development Agency, a governmental agency that stimulates regional development. The GoT is encouraging farmers in the region to invest in almond orchards by increasing awareness of the potential benefits in various ways. However, reaching enough production to meet Turkey’s almond demand, with 50 percent produced in the Adiyaman/Kahta region by 2023/24, does not seem feasible given the current economic conditions.
b. CONSUMPTION
Post forecasts that there will be an increase in almond consumption to 40,000 MT in MY 2021/22 because of increased vaccinations for COVID-19 in Turkey and the opening of hotels, cafes, and bars. Although TL has not gained back value since last year, it has been more stable that benefits consumers. Almonds are mainly consumed as a snack food and limited amounts are used in the confectionary and cosmetics industries in Turkey. As with pistachios, the packaging of tree nuts, including almonds, has increased and about 1/3 of tree nuts are sold pre-packaged.
Almond retail prices in Istanbul, Turkey are about 100 – 165 TL/kg (11.96 – 19.73 USD3/kg) for both shelled roasted almonds and raw almonds. Prices vary by neighborhood and according to retailer. Prices increased in terms of the Turkish lira but decreased in U.S. dollar terms due to the depreciation of the lira against the U.S. dollar.
TRADE
Imports of almonds are expected to be around 31,000 MT for MY 2021/22, the same number as in MY 2020/21 because of stable consumption.
Turkey is a net importer of almonds. The United States was the major supplier of high-quality almonds in MY 2020/21 and is expected to be the major supplier for MY 2021/22 as well. Australia, Spain, Uzbekistan, and Iran are other suppliers of almonds to Turkey.
After January 1, 2018, import tariffs on almonds imported from all countries decreased to 15 percent. However, there have been an additional 20 percent tariffs on U.S.-originated tree nuts since August 2018 as retaliation to the U.S. Government increasing the tariffs on Turkish steel and aluminum. On May 17 2019, the additional tariffs on nuts were halved (reduced to 10 percent).
In total, the final import tax on almonds from the United States is now 25 percent of the cost, insurance and freight (CIF) value of the shipment and is 15 percent for almonds from all other origins. There is still a demand for high quality almonds in the Turkish market and according to the sector, domestic production will not be able to meet this demand with domestic production in MY 2021/22.
Turkish customs also has a minimum reference (oversight) price for nuts. If the CIF invoice value of the in-shell almond is at or below 4,400 USD the tariff will be applied at 4,400 USD per ton. If the per ton CIF invoice value is greater than 4,400 USD, the tariff will be applied at the actual CIF invoice value. The tariff for shelled almonds is based on a minimum CIF per ton value of 6,900 USD or greater.
If almonds are imported in the scope of the Inward Processing Regime (IPR), importers do not pay tax if the almonds will be exported after being processed, such as being shelled or packaged. Turkey’s main almond export destinations are Middle Eastern and North African countries (such as Iraq, Saudi Arabia, Libya, Tunisia, and Algeria).
As of May 2020, a new regulation is in effect for suppliers of almonds to Turkey, along with suppliers of many other items such as, but not limited to, walnuts and cashews. All suppliers of almonds, i.e. exporters, to Turkey should register themselves in an online system entering company information and filing verified documents via Turkish buyers. You may consult to our report on the New Regulation Requires Registration for Exporters of Tree Nuts and Other Products to Turkey if you need to register your company in the new system. This regulation is intended to be a surveillance system to discourage the illegal flow of these nuts into the country.
c. POLICY
As with other tree nuts, the GoT supports almond farmers who are registered in the “Farmers Registration System.” Supports are announced by the GoT in the middle of each calendar year. These supports are available to all farmers regardless of what they are planting.
GoT offered almond farmers the following supports for the year 2021:
100 TL/da (11.96 USD/da) and 400TL/da (47.84 USD/da) respectively for the establishment of orchards that are planted with standard seedlings and certified seedlings
50 TL to 100 TL /da (5.98 USD/da to 11.96 USD/da) for organic agriculture;
40 TL/da (4.78 USD/da) for Good Agricultural Practices;
23 TL/da (2.75 USD/da) for fuel and fertilizer.
III. WALNUTS
a. PRODUCTION
In MY 2021/22, Post expects production of walnuts to reach 68,000 MT. Drought conditions affected Turkey during spring and summer 2021. The lack of spring rains will affect the yields of the walnut trees throughout Turkey, especially the ones that have not been irrigated. There was also some hail and frost damage in the inner Anatolian region that will have small effect on the total production. Since many newly (in the last decade or so) established commercial orchards are being irrigated, drought will not affect those orchards as much. Weather conditions were normal for pollination.
Walnut trees, like almonds, are scattered throughout the country. They grow in almost every province of the country, but commercial plantations of walnuts are relatively new to Turkey. The GoT has implemented programs to encourage increasing the production of walnuts. Commercial orchards have been established in the last 10 – 15 years in the Thrace region, in the Sakarya and Kocaeli provinces (in the Marmara Region) and in the Adiyaman province in the Southeastern Region of the country. However, these are insufficient to meet the demand for high-quality walnuts among Turkish consumers. The GoT encourages producers to establish new walnut orchards by allocating free land for a term of 49 years and some interest-free financial support programs. The government also supports farmers who are registered in the “Farmers Registration System” for using certified seedling in these orchards. New orchards are being established in many provinces by the private sector due to these government incentives and high market prices. These new orchards are in the Aegean, Marmara, Southeastern Anatolia, and Mediterranean regions. Chandler is becoming the most popular variety of tree to plant due to consumer preference. However, some issues remain in terms of the suitability of varieties to local conditions and the reliability of certified seedlings.
Although MinAF tried to increase production of walnuts with special afforestation projects in the last decade, this did not help much since these were not commercial walnut farms. Many trees were planted in soils or locations which were not ideal for walnut production. Irrigation is mostly not available in these lands and delivering the water to the plots is costly. As a result, production of walnuts in Turkey did not increase significantly because of these various projects.
Until 1970, walnuts had been propagated only by seeds and therefore, until the last decade, it was very difficult to find established orchards of standard cultivars in Turkey. However, the importance of propagation by grafting and budding is now understood and as a result, orchards of standard cultivars are becoming increasingly widespread. Currently the major problem for walnut producers in Turkey is low yields. There is also great need for improved varieties. The Yalova Horticulture Research Institute, which is located in the Marmara Region, is Turkey’s leading walnut research facility and the developer of new varieties. Commercial production of the improved varieties developed by this institute has begun in Balikesir, Denizli, Bursa, and Kahramanmaras provinces.
As of 2021 the Turkish Walnut Producers’ Association has been established and their first general assembly has been gathered in summer of 2021. The association has 30 members who are all large size (in Turkish scale of orchards) commercial walnut producers (as opposed to traditional farmers with some trees planted here and there). Members have 35,000 da of orchards altogether and 900,000 trees as of 2021. They use modern agriculture techniques and use more mechanization than traditional producers in Turkey. The association have declared that they aim to reach an amount of 20,000 MT harvest in two to three years.
b. CONSUMPTION
The walnut consumption estimate for Turkey is 150,000 MT for MY 2021/22, a slight increase from last year.
In Turkey, walnuts are commonly used in desserts, just like pistachios. Turkish desserts such as pestil and köme are made by combining walnuts with mulberries and grapes. Walnuts are also used in baklava, ice cream, halva production, cookies/cakes, breads/bakery, pastries, and in the dried fruit industry as well. The leaves and green shells are used as a pigment in Turkey. Walnut wood has been used for the furniture industry for many years.
Walnuts are the second most-purchased nut in Turkey after hazelnuts. Walnut consumption has increased significantly in recent years due to consumers understanding the health benefits of the nut and the increased availability of packaged tree nuts, including walnuts. Most walnuts in the market are sold in bulk, in-shell. Turkish consumers purchase walnuts regularly and use them as an ingredient in everyday foods.
Currently walnut retail prices have been stable since last year in terms of TL prices. The U.S. dollar prices have dropped slightly due to TL losing value in the past year. Shelled walnuts are priced from 85 to 185 TL/kg (10.17 – 22.12 USD5/kg). The prices of shelled walnuts, in the cheapest outlets are similar to those of the last year but more luxury/premium outlets’ prices are higher in terms of TL and USD compared to last year. The inflation in the country has affected price levels more in more premium outlets, since consumers with more purchasing power shop there and the outlets can afford to increase prices without losing customers. Nevertheless, because of the availably of cheaper outlets, consumption levels have not dropped. In-shell walnuts are from 35 to 50 TL/kg (4.20 – 5.98 USD/kg) varying by production and retail outlet, the TL prices are as same as last year and again the USD prices have fallen due to value loss of the TL.
c. TRADE
94,000 MT of imports is projected for MY 2021/22. It is an off-year for pistachios, therefore more walnuts might be used in traditional deserts etc. In addition, due to popular availability of COVID-19 vaccine in Turkey people will be going to cafes, bars, hotels and restaurants a bit more compared to last year. There will be increased demand for imported walnuts even though production increases are also expected.
The United States continues to be the major in-shell walnut supplier in MY 2021/22. After the United States, Chile, Ukraine, China, Uzbekistan, and Moldova are the other significant walnut suppliers, largely due to price and seasonality considerations. Due to retaliatory taxes on U.S.-originated walnuts, traders have purchased imports as much as possible from other sources. Traders agree that Turkey will continue to be an importer of walnuts due to the demand for high-quality product by Turkish consumers. Depending on the year, around 30 to 50 percent of total walnut consumption is supplied through domestic production. Due to the strong demand for high quality walnuts in the Turkish market, the remaining amount is imported to meet the demand.
On December 31, 2020, GoT published a Presidential Decision Decree (PDD) that raised the import tariff for in-shell and shelled walnuts to 15 percent for all origins, except for countries that have a free trade agreement (FTA) with Turkey. The government abolished the Housing Development Fund Fee (HDFF) of 320 USD/MT that were being paid for importing walnuts to Turkey.
The following oversight (or reference) price system was re-introduced in the PDD.
An oversight price is a minimum price that the GoT will use for tax purposes. For example, even if a Turkish trader has purchased a metric ton of in-shell walnuts for 2,500 USD, which is below the oversight price, the tariff will be calculated using 3,500 USD. However, if the actual price is more than 3,500 USD then the GoT will use the real invoice price in calculating taxes.
In addition to the 15 percent tariff rate for all origins as explained above, there is also a 10 percent additional tax on U.S. originated tree nuts as a countermeasure for U.S. increasing tariffs on Turkish steel and aluminum. You can read about these additional taxes on some U.S. originated products in our previous reports. As a result of the recent tax change and the continuing retaliatory tariffs, the customs duty rate on U.S. originated walnuts is 25 percent (15 + 10), as it was before August 2020.
Since May 2020, all exporters of walnuts to Turkey must register in an online system with certain required company information and additionally file verification documents via Turkish buyers. This is intended to be a surveillance system to discourage the illegal trade of walnuts. You may consult our report on the New Regulation Requires Registration for Exporters of Tree Nuts and Other Products to Turkey if you need to register your company to the system for exporting to Turkey.
Turkey’s processing industry has grown in recent years. Imports of both in-shell and shelled walnuts, and exports of shelled walnuts have increased substantially. Importers can utilize the Inward Processing Regime (IPR) for walnuts that are imported to be further processed and exported to third countries.
With the IPR, importers do not pay import tariffs if they export a value-added end product. U.S. walnuts imported under IPR tend to be processed and exported to Middle Eastern and African countries (Egypt, Saudi Arabia, Tunisia, and Libya).
d. POLICY
The GoT supports walnut farmers who are registered in the “Farmers Registration System.” Supports are announced by GoT in the middle of each calendar year. They are mostly the same as last marketing year in terms of TL (and decreased in terms of USD since TL lost value in a year).
GoT offered farmers the following supports for the year 2021:
100 TL/da (11.96 USD6/da) and 400TL/da (47.84 USD/da) respectively for the establishment of orchards that are planted with standard seedlings and certified seedlings
20 TL to 40 TL /da (2.39 USD/da to 4.78 USD/da) for organic agriculture;
40 TL/da (4.78 USD/da) for Good Agricultural Practices;
23 TL/da (2.75 USD/da) for fuel and fertilizer.
IV. HAZELNUTS
Turkey is the largest producer and exporter of hazelnuts in the world, accounting for about 70 percent of world production and around 75 percent of world exports. Hazelnuts are generally grown in the Black Sea region of Turkey.
Post forecasts hazelnut production will be 625,000 MT for MY 2021/22 in Turkey because of better yields that the previous marketing year.
The Black Sea region has not been affected by the drought in Turkey. Rains in the spring were at good levels, and fewer rainy days meant more sunshine during the summer while the hazelnuts were forming and growing. This meant early harvest in some lower-altitude orchards. There have not been any major frost or hail problems in the Black Sea region this year to affect pollination, and there were no pest issues. Therefore, we forecast a good crop in MY 2021/22.
MinAF has not announced their official production estimates, although they have done two studies. Market sources report that these studies indicated about 650,000 MT in production. However, other sources have indicated to us that the MinAF studies have unrealistically high yield estimates.
The president of Turkey himself declared the official Turkish Grains Board (TMO) purchasing prices for hazelnuts in a late August speech. Giresun quality hazelnuts will be purchased at 27.00 TL/kg and Levant quality will be purchased at 26.50 TL/kg. The Minister of Agriculture and Forestry announced that TMO will purchase all the hazelnuts brought to them, given that the quality standards are met, and pay farmers within 20 days.
Turkish hazelnuts usually ripen between early and late August, depending on the altitude of the orchard and weather conditions. Hazelnuts are hand-picked from the trees and dried in the sun. Harvesting takes place during several weeks in August and September. Turkey produces around 600,000 MT of hazelnuts under normal weather conditions. Although hazelnuts are grown in more than 48 provinces around Turkey, production is primarily concentrated along Turkey’s Black Sea coast. Hazelnut orchards are typically located within 30 km of the coast. In the western Black Sea region, the growing region starts at Zonguldak (east of Istanbul) and extends east along the entire Black Sea and the mountains until close to the Georgian border. There are approximately 500,000 producers and 4,000,000 people directly or indirectly employed by hazelnut production in Turkey on an area of around 725,000 hectares.
The Black Sea region is divided into three distinct growing areas: (1) The hilly region from Ordu to Trabzon, centered around Giresun, and east of Trabzon (including Rize) which in a normal year produces about 55 percent of the crop; (2) The flatter, mixed farming region west of Ordu to Samsun, which produces about 15 percent of the crop; and (3) The area west of Samsun, which produces the remaining 30 percent of the crop. Hazelnuts require relatively little effort to cultivate and input requirements are low. However, with better maintenance, the yield efficiency of Turkish hazelnut orchards could easily be improved. Due to socio-economic reasons, Turkish hazelnut orchards are not well maintained, and the trees are aged with some orchards dating back 70 years.
Both the GoT and private companies purchase hazelnuts from producers. About one third of the exports are bought by Italian-owned Ferrero Hazelnut Company, which also owns the brand Nutella. The company purchased the largest Turkish trader and its Italian competitor in 2015 and became the largest hazelnut trader in Turkey. Approximately half of all exports are carried out by international companies. Most years, TMO purchases and stocks hazelnuts on behalf of the GoT. In addition, the Union of Hazelnut Agriculture Sales Cooperatives (FISKOBIRLIK) in some years purchases and stocks nuts to keep prices stable. Note that USDA does not maintain a Production, Supply and Distribution table for hazelnuts. — By Caglar Eerdogan, USDA Foreign Agricultural Service
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.
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.”
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 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:
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
Building healthy soils has tremendous benefits. Increasing the amount of organic matter within the soil can improve water retention and protection, reduce erosion, sequester carbon, and improve crop yields. Increasing water scarcity and severe drought conditions make boosting soil resilience an even greater priority for California. Researchers are exploring how the environmental benefits of healthy soils initiatives can extend even further when readily available agricultural resources are used in regenerative ways.
A team of UC Davis researchers, led by Dr. Ruihong Zhang, has recycled dairy manure and almond twig waste into a nutrient-rich, safe, organic soil amendment. The new product was created and applied, and its effects continue to be studied. The idea is that the woody material can capture nutrients in the manure and slowly release them, as needed, into the soil. Because the product is also pelletized, it can be applied to croplands and orchards with standard farm equipment. Ultimately, the researchers hope to create a new model for using recycled agricultural resources to sequester carbon and provide benefits to the soil, crops, and the environment.
The partnership was a natural fit, as the Central Valley is home to many neighboring dairy farms and almond orchards, which have a long history of collaboration. Dairies are already major consumers of almond co-products, including hulls (used as a highly nutritious feed ingredient) and shells (used as a bedding material). With a goal of achieving zero waste by 2025, the California almond community has been actively investigating a wide variety of ways to utilize woody biomass, including twigs, pruned branches, and tree removals. Meanwhile, the dairy community has been exploring ways to expand use of manure nutrients across California’s diverse agricultural landscape.
“Creating valuable manure-based soil amendments is an area that the dairy sector has been focusing on, but there are some challenges,” said Denise Mullinax, Executive Director of the California Dairy Research Foundation (CDRF). “We know that farmers want a soil amendment with a consistent and reliable nutrient profile. It also needs to be easy to transport and apply. That’s why we are thrilled to support this team of esteemed researchers and to partner with the almond industry on this project. Together, we’re piloting a new avenue to enhance the benefits of both manure and woody biomass.”
The initial project was funded by the California Department of Food and Agriculture (CDFA)’s Healthy Soils Program. As the project scope grew, the researchers were awarded additional funding from the demonstration category of CDFA’s Alternative Manure Management Program. With supplemental support from the CDRF and the Almond Board of California, the research project developed to include a team of more than 20 individuals—including researchers, farmers, and industry collaborators—contributing throughout a three-year timeframe. The project includes two seasons of creating soil amendments and applying them to the orchard, and three years of studying effects on soil health, emissions, tree health, and crop yield, while ensuring food safety.
Using composted manure from Wickstrom Dairies, the study will shine a light for future research on expanding and improving manure utilization. Like many California dairies, the farm uses a separator system to remove solids from liquid manure streams. The solids are then sun dried in rows that are turned over periodically, as a form of composting. Dried manure solids are traditionally used for bedding or are applied to dairy forage fields. For this study, a portion of the finer manure solids were co-composted with twigs from almond production and then ran through a pelletizer. Pelletizing the compost is intended to provide a more consistent blend, while creating an easy-to-use product. The pelletized compost product has now been applied to the pilot orchard for two consecutive seasons. Four treatments were used to examine differences in manure-only verses manure-twig and pelletized versus non-pelletized compost products.
“We look forward to seeing the final results,” said Mullinax. “Dr. Zhang and her team are demonstrating that it’s possible to make a pelletized product that is safe and easy to use, while fully assessing the environmental benefits. It’s projects like this that will pave the way for implementing advanced nutrient management on a larger scale, greatly enhancing soil health and further improving water conservation and protection.”
The research team highlighted the project by providing a virtual field day, and they plan to host another outreach event this fall. Research is scheduled to conclude in March 2022. However, longer-term effects on soil health will continue to be studied. And the final report will only be the beginning of more learnings to come.
Potential research areas to be explored next include applications on different kinds of crops, comparing a pelletized versus granulated product, and using varying types of dairy manure solids (from different types of separators, settling basins, and lagoon solids). Additionally, the use of infrared technology versus composting will be explored prior to pelletization or granulation. All options will also need to be assessed for cost-effectiveness and potential scalability.
The manure-twig project is part of a broader, collaborative effort to expand manure’s role in healthy soils. California dairy farmers will continue to work with researchers, state officials, and other agricultural professionals to find more ways to maximize manure’s role in building healthy soils and protecting our air, water, and climate. The possibilities for sustainable solutions are bright when farmers and scientists come together to make new use of existing resources and technologies.
California dairy farmers will continue partnering to help make an underutilized resource an important part of a healthy-soil future.
