Pacific Nut Producer Magazine

Category: Walnuts

  • California Walnut Credit-Back Referendum

    The California Walnut Board (CWB) is pursuing credit-back authority. The USDA recently published the Secretary’s decision in this regard and has ordered a referendum vote of the growers. This authority will allow for handlers to receive a credit-back for eligible marketing expenditures of 70 cents for every dollar in spend. This important authority is one of the ways the CWB is modernizing the Order to make it work harder for industry, using every possible tool available to spur new investment in new product development/marketing initiatives to continue growing walnut consumption.

    What is Credit-Back Authority?

    • Credit-back is an authority that several agricultural commodities (almonds, prunes, etc.) use to allow handlers to conduct eligible marketing activities in return for a partial credit/rebate on assessments.
    • The CWB does not currently have this authority in the marketing order; therefore, formal rule making has been undertaken to add the authority to the order.

    Objective/Purpose of the Program

    • Objective of the program – effectively promote the sale, use and consumption of California walnuts
    • Purpose – to encourage handler market promotion in addition to the CWB’s generic marketing efforts

    Structure/Mechanics

    • The credit-back authority, once approved, will be in the Order, whether industry chooses to use or not.
    • Program authorization to spend will be determined on an annualized basis in conjunction with fiscal budgeting.
    • Determining available dollars for the crop year will be based on percent of budgeted assessment revenue.
    • Each handler’s share of available dollars to be based on prior year crop acquisitions.
    • Credit-back will be .70 cents per $1 of spend on eligible marketing & promotional activities.

    What are the rules & requirements?

    • Credit-back requires California Walnuts wording and/or handler name with the word “walnut(s)” to be eligible.
    • Credit-back is not intended for use with private label/third-party products. Activities containing other nuts and/or fruits, etc., would receive credit-back based on the proportionate share of walnuts included.
    • Walnuts used as an ingredient in manufactured food products would receive credit-back based on the proportionate share of walnuts included.
    • Complete rules, regulations and eligible/ineligible activities are defined in the Credit-back Guide.

    What are the impacts to the Board?

    • To be funded from prevailing assessments, likely reduction in domestic program, given this is the largest area of CWB spend.
    • Available dollars for the crop year to be based on percent of budgeted assessment revenue; CWB Executive Committee to make a recommendation to the Board annually.
    • Similar programs have credit-back in the range of 10%-15% of assessments.
    • Staffing implications to be determined based on the breadth and depth of the program.

    More information regarding this referendum can be found on the Federal register.

    Voting

    The voting period is November 30 – December 11, 2020. The CWB encourages grower participation in this process. Please be on the lookout for a ballot from USDA. If you do not receive a ballot, please contact Terry Vawter at (559) 487-5905 or Jeffery Rymer at (559) 987-2293.

  • Walnut Replanting Considerations in a Lean Price Year

    When prices are lean walnut farming is tough business. Farm advisors are not economists or financial advisors. However, farm advisors can be useful in providing best practices for economically sustainable production. Two key economic decisions growers face are when to replant individual trees and when to remove and replant entire orchards.

    Learn from Dying Trees to Improve Management of the Whole Orchard:

    Former Advisor Carolyn DeBuse, and Emeritus Advisor Bill Krueger wrote about the need to pause before replanting, by asking why the tree died in the first place. Saturated soils and soil borne pathogens are common culprits for tree loss. It is important to carefully evaluate recently declining trees, particularly evaluating their root systems for a possible cause. Your pest control advisor or local farm advisor can help with this diagnosis. Can changes be made to reduce the chance of additional trees declining and increase the chance of success for replanted trees? For Phytophthora and nematodes, these changes are often genetic (i.e. replant rootstock selection) but may also include a chemical approach. However, the needed action is just as often cultural, whether it is adjusting irrigation set time to prevent ponding or installing stream-splitters to keep water off trunks.

    Water logging is a common cause of walnut tree decline: sacvalleyorchards.com/blog/walnuts- blog/yellowing-collapsing-walnut-trees-pt-1-water-logging. The Howard variety appears particularly sensitive to saturated soils: sacvalleyorchards.com/blog/walnuts-blog/yellowing-collapsing-walnut-trees- pt-2-yellowing-howard-problem. In addition to tracking saturated conditions with soil moisture monitoring, a key practice to not over-watering is irrigating only when demanded by the trees, as indicated through regular pressure chamber use. Learn more at: sacvalleyorchards.com/manuals/stem-water- potential.

    Tree Replanting Decisions:

    When a tree dies and is removed, there is always a question of whether to replant in that spot. The decision of whether to replant an individual tree is a gamble that the replant will become established and produce enough to offset its associated costs by the end of the orchard’s life. A decision that is an automatic “yes” early in the orchard’s life becomes more complicated as the orchard ages.

    The shading from surrounding trees, and the ensuing low probability of successful vigorous growth weighs against the desire to replant and establish lost production. DeBuse and Krueger noted that if the orchard floor has over 75% shade at midday, the chance of a successful replant is slim. However, UC Davis Walnut Specialist Bruce Lampinen believes that a successful replant is dubious in orchards with over 60% shading. If the decision to replant has been automatic for you, pause to consider the cost of an unsuccessful replant and first evaluate how much light is available to the new tree.

    After weighing the success of the replant and evaluating why the original tree died, if you do replant, follow the best practices to help nurture this investment. Root removal, possible spot fumigation, nursery product selection, and correct planting are the key steps. Of these, nursery product selection is a particularly critical step, if possible, tailor the choice of rootstock to the main source of tree loss (see rootstock table below). As part of nursery selection, choosing a bareroot over a potted tree is typically ideal because you are starting with a tree that is larger and easier to manage. Once the replant is in place, the tree stands little success without paying extra attention to the need to modify irrigation and fertilization. You can learn more in the excellent guide by DeBuse and Krueger at: sacvalleyorchards.com/walnuts/orchard-development/replanting-individual-trees.

    Orchard Replanting Decisions:

    In addition to a lack of available light, general orchard decline is a second major reason to rethink replanting individual trees. General orchard decline in old age, frequently the result of weak trees facing an onslaught of multiple pests and diseases (figure 1), means replants make little sense because of the short window remaining in the orchard’s life. Instead, the orchard should continue to be farmed without replants until it is no longer economically feasible to do so.

    Figure 1. An orchard facing general decline, with a high rate of tree loss. Extensive crown gall, trunk cankers, and high nematode counts all present in this orchard.

    Amidst lean prices, if this is the year that you slate an orchard for removal, there are several steps you should consider before removal. A critical initial step, just as with replanting individual missing trees, is to ask why the orchard is in decline, and if those problems may follow you into the next planting. In addition to assessing the risk of the replant problem, and the persistence of crown gall, a nematode sample taken while the current trees are still in the ground is a great start. You can learn more about nematode sampling at: growingthevalleypodcast.com/podcastfeed/2019/10/22/nem-sampling and result interpretation and the next steps for replanting amidst high lesion nematode counts at: sacvalleyorchards.com/walnuts/orchard- development/replanting-into-nematode-infested-soils.

    Building upon this initial diagnosis step, consider the following steps:

    1. Assess potential carry-over problems before harvest.

    2. Kill the roots of the old orchard. The established best practice for this is cutting down trees above ground during October and within 5 minutes painting the stump with Garlon3A, or a mixture of 1:3 mixture of Garlon3A and MorAct.

    3. Wait a full growing season before replanting walnuts. This is the step where there are a range of management choices, such as the decision to fumigate, the use of a spring-summer crop to dry down deep soil moisture, or even exploration of a new technique like anaerobic soil disinfestation.

      This is also the step, where you could consider whole orchard recycling (WOR), whereby the previous trees are chipped and incorporated back into the soil. In almonds, this has been successful both for the performance of the subsequent planting and for soil health. Problems and success with WOR in walnut have yet to be demonstrated, with only a single pilot demonstration of young second generation WOR trees to- date. Until we have data on the persistence of crown gall and lesion nematode in roots of a recycled orchard, this practice is not advised for orchards with heavy cases of these afflictions. You can learn more about WOR at orchardrecycling.ucdavis.edu. WOR is an expensive practice, however the practice is now recognized for potential financial support through the CDFA’s Healthy Soils Program: cdfa.ca.gov/oefi/healthysoils.

      1. Fumigate, if necessary. The choice of whether to fumigate is centered around the concerns of root lesion nematodes, the replant problem, and to a lesser extent crown gall when replanting walnut orchards. Specifically, if lesion nematode is present in the old orchard, nematicide (e.g. Telone) fumigation, in addition to all the other steps may be necessary to have a successful replant to walnut. Fumigation is expensive, however the carryover problems from the previous orchard can prove far more costly. Cost savings with fumigation can be achieved by opting for strip fumigation specifically mapped for the tree rows, instead of broadcast fumigation. Adequate fumigant distribution can be problematic especially on clay-type soils. To ensure a successful fumigation, it is critical to dry down the soil to 12% moisture for optimal fumigant efficacy.

      2. Replant on an appropriate rootstock. Consider the potential benefits of clonal Paradox rootstocks, particularly against nematodes (VX211) and Phytophthora (RX1). See detailed rootstock traits in the table below.

      Find more about orchard removal and replant steps at: sacvalleyorchards.com/walnuts/diseases/considerations-for- replanting-walnut-orchards. Finally, if you are removing and planting a new walnut orchard, a key document to have on hand when financially planning is the Sacramento Valley UC Walnut Cost Study, which can be found at: coststudies.ucdavis.edu/en/current/commodity/walnuts.

      Article By:

      -Luke Milliron, UCCE Orchards Advisor Butte, Glenn & Tehama Counties

      -Katherine Jarvis-Shean, Orchards Advisor Yolo, Solano & Sacramento Counties

  • Driving Market Demand for Walnuts During COVID-19

    California Walnut Board — As we enter the seventh month of lockdowns and shelter-in-place, many people wonder what the impact of this pandemic will be on the walnut industry and consumer spending. Together, as your partners, we have been monitoring and evaluating the COVID-19 media landscape and consumer sentiment and have adapted plans and messaging as necessary across all of our audiences and platforms, ensuring our messaging continues to resonate with our consumers and drive market demand for walnuts.

    During COVID-19, the California Walnut Board (CWB)/California Walnut Commission (CWC) have been working collectively to promote the health benefits of walnuts to U.S. consumers and around the world. One example includes tapping into the pandemic trend of “at-home baking” and showcasing the many benefits of walnuts. Another example includes expanding our retail efforts with an e-commerce campaign as well as a targeted snacking campaign in the U.S., which will drive awareness and encourage purchase. There remains incredible growth opportunity in the U.S. market, particularly in retail, to drive demand. We will continue to find new ways to reach our consumer in the U.S. and around the world.

    Capitalizing on Current Trends

    It is the CWB/CWC’s goal to ultimately make walnuts the desired and preferred choice for consumers and the ingredient of choice for food manufacturers and food service operators – used in cooking, baking and snacking. Having a steady drumbeat of media coverage on walnuts is key to keeping walnuts top of mind with the consumer, which drives them to purchase at retail food outlets.

    Cooking and baking at home is trending and has been for months, as many people worldwide continue to shelter in place. In the U.S., we pivoted our media outreach to focus on baking, especially banana bread and cookie recipes. Total U.S. media coverage was up 85% year-over-year for the March through May timeframe and was viewed by consumers 3.1 billion times, leading them to in-store/online purchase. Interest in baking and cooking drove recipe coverage for April/May to exceed holiday coverage, demonstrating record interest in using walnuts.

    In India, a large percentage of the middle class has hired help to cook their meals, and during COVID, many left the major cities to return to their villages. For some, this was the first time that they have had to prepare meals for themselves, and recipes and instructional videos from celebrities, chefs and prominent influencers have become a lifeline. With our versatility across all parts of Indian cuisine, as well as international recipes, we reached out to the media, promoting walnuts as a healthy staple to have in every home. Each month, these efforts have reached hundreds of millions. For example, during just the month of May, our recipes alone reached over 237 million consumers.

    Health and wellness are top of mind now more than ever with consumers who are looking for foods that will contribute to a healthy lifestyle. Our ongoing messaging around the scientific health research continues to solidify walnuts as a key food to have at home year-round. In Spain, during the height of lockdown, we shared with consumers how to keep a healthy lifestyle with walnut recipes and nutritional and exercise tips through videos, influencers and press activities reaching 26% of the Spanish population.

    These are just a few examples of how we capitalized on timely and media-worthy opportunities to drive media coverage and encourage purchase.

    You may be wondering how media coverage impacts you as a grower/handler. The more visibility we have with press and consumers, the more likely they are to purchase, driving retail and industry demand.

    Snacking Drives Consumption

    To drive meaningful ways for the media to cover California walnuts, the CWB commissioned a consumer survey to assess changes in snacking habits in light of COVID-19. The survey revealed that, not surprisingly, consumers are snacking now during COVID more than ever. They are also nearly split on preference for sweet versus savory snacks. Providing these types of timely and relevant hooks is key when pitching media outlets to grab their attention and make sure they write about walnuts.

    Typically, consumers are more likely to try products recommended by a celebrity or influencer than by the brand. One example of using a key influencer (with celebrity status) is with Ali Fedotowsky-Manno, of The Bachelorette and E! television fame. We partnered with Ali to promote her favorite walnut snack ideas, encourage trial and drive market demand.

    Online Shopping

    As the pandemic continues, consumers’ cooking and shopping habits have changed. Consumers are looking for simple recipes using ingredients they already have in their refrigerator/pantry. As part of their changing habits they are also more open to learning new ways to do things, which include shopping online. To piggyback on this trend of online shopping, the CWB/CWC created shoppable engagements. A shoppable engagement allows a customer to add recipe ingredients directly to their online shopping cart – leading to purchase. In the U.S., sponsored recipes with walnuts as an ingredient increased 38%, while California Walnuts recipes and blog articles promoted through digital media resulted in a 200% increase in clicks versus the same period a year ago, showing that our marketing efforts are leading to purchase.

    In the U.S. we also conducted a retail e-commerce test program that launched in July on Kroger, Amazon, Instacart, Albertsons Safeway and Ahold banners. The online program drove mass awareness and ensured California walnuts stayed top of mind while consumers were actively grocery shopping online. A dedicated California Walnuts product page created an easy way to encourage purchase, and at the end of August, this program had delivered $490,687 in attributed sales with over 67,000 units sold. Instacart has had the strongest performance with 13.8x return on advertising spend; 2-4x is the typical benchmark for the platform.

    In Korea, we ran an online promotion for one week at the end of April with an e-commerce site called “we make price” that is popular for its daily delivery service. We created a landing page with over 40 different sizes and packaging of California walnut products and promoted the landing page through the we-make-price mobile app. Our ad reached 3.6 million consumers, and with this promotion, we saw a 2,340% sales increase year-over-year. With e-commerce promotions, not only do we have the opportunity to drive sales, but we can also create awareness with consumers who are actively in the purchase mode.

    As COVID-19 continues to unfold in the coming months, the CWB/CWC continue working to protect, develop and grow the California walnut industry. There remains an incredible growth opportunity in the U.S. and around the world to drive market demand.

    For the latest news and developments, please visit walnuts.org.

  • Japan Grants Market Access for All Varieties of US In-Shell Walnuts

    As of September 16, 2020, Japan allows imports of all varieties of U.S. in-shell walnuts to Japan. Back in 1986, the Ministry of Agriculture, Forestry and Fisheries (MAFF) granted market access to Hartley, Payne and Franquette varieties of U.S. in-shell walnuts. Since then, the United States had requested that Japan expand market access to all U.S. walnut varieties.

    On September 16, 2020, Japan revised the Ordinance for the Enforcement of the Plant Protection Act with immediate effect. This revision allows exports of all varieties of U.S. in-shell walnuts to Japan.

    Due to Japan’s phytosanitary concern about codling moth in the United States, U.S. in-shell walnut exports to Japan must be fumigated. Furthermore, a phytosanitary certificate issued by APHIS is required to import fresh and frozen in-shell walnuts to Japan. For detailed import requirements for in- shell walnut, please consult MAFF’s Standards and Regulations; for U.S. walnuts (available in Japanese only). — By Tomohiro Kurai, USDA Foreign Agricultural Service

  • CDFA Walnut Handlers Annual Report

    California Department of Food & Agriculture — Walnuts produced by handlers in 2019 totaled 10,902 tons, down from the 11,992 tons reported in 2018. This figure does NOT include walnuts purchased from other handlers or producers.

    The total 2019 walnut crop purchased from producers, for whom pricing had been finalized, reached 624,890 tons at an average price of 95.0 cents per pound, up from the 67.3 cents per pound average in 2018. This price is rounded to the nearest tenth of a cent per pound and includes all bonuses and allowances.

    Purchases from producers, for whom pricing was NOT finalized, totaled 18,763 tons. The average “good faith” estimate of the final weighted average price for this tonnage was 83.8 cents per pound.

    The quantity of all walnuts purchased from producers was 643,653 tons for the 2019 crop. This figure does not include walnuts produced by the handler or purchased from other handlers. 

    The tonnage produced by the handler plus tonnage purchased from producers for the 2019 walnut crop was 654,555 in-shell tons.

    Information contained in this report was supplied by walnut handlers to fulfill reporting requirements of Sections 55601.7 and 55601.8 of the Food and Agricultural Code. The report includes all tonnages of walnuts that were either produced by the handler or purchased from producers. The final weighted average price, including bonuses and allowances, has been reported for all contracts which were finalized.

    All 2019 crop transactions completed through the close of business on August 31, 2020 are included in this report. A “good faith” estimate of final weighted average price was reported for those contracts which were not final on the same date. The data are shown by major varieties at the State level only.

    DEFINITIONS

    Producer: A person or operator who is responsible for the walnuts in the unprocessed state.

    Handler: Firm that processes and markets walnuts.

    Finalized Purchases: Tonnage purchased from producers, for which a pricing contract has been completed.

    Non-Finalized Purchases: Contracted tonnage, for which a final price has not yet been determined.

    Free Tonnage: Tonnage received by a handler, for which the only Federal marketing order regulation is a minimum quality or size standard. Reserve tonnage is the tonnage set aside as authorized by a Federal marketing order.

    Weighted Average Price: Weighted average price reflects prices or “good faith” estimates of prices as reported by handlers and include any bonuses or allowances. 

  • China Ramps Up Walnut, Macadamia & Pecan Production (Struggles with Almonds & Pistachios)

    China’s in-shell walnut production is forecast at 1.02 MMT in 2020/21, an increase of 2 percent from the previous year, supported by a good harvest in the country’s top two producing provinces. Walnut imports will continue to decline as a result of increased local production. Almond and pistachio imports from the United States are expected to rebound due to improved supplies and the implementation of a tariff exclusion process.

    Production

    Walnuts

    China’s walnut production (in-shell basis) is forecast at 1.02 million metric tons (MMT) in marketing year (MY) 2020/21 (September-August), an increase of 2 percent from the previous year. This is driven by a bumper harvest in Xinjiang and Yunnan, the country’s two leading walnut-producing provinces due to favorable growing conditions. Walnut quality is also expected to improve, according to walnut dealers in Yunnan. Although northern walnut-producing areas, including Shanxi, Shaanxi, Hebei, and Gansu provinces, encountered severe frost damage during the blossom period, FAS China forecasts the crop losses are offset by production gains in Xinjiang and Yunnan. Furthermore, weather anomalies have led to smaller walnut sizes in these northern provinces. With more plantings entering the bearing stage, the country’s walnut production is forecast to continue increasing for years to come.

    In recent years, walnut planting area expanded driven by high walnut prices and government support programs in mountainous and hilly areas. In MY 2019/20 planting area declined as walnut prices declined. In MY 2020/21 industry sources indicated certain areas with walnut production will not be harvested due to low walnut prices and a lack of consumer demand for particular varieties. In Yunnan province, where most harvesting is done by hand, the walnut industry faces ongoing challenges due to increasing labor costs and aging farmers.

    In Xinjiang, however, walnut orchards sit on plains that make the management and harvest much easier. With the rapid expansion of acreage as well as the development of a specialized market and processing facilities, Xinjiang has quickly become the symbol of China’s future walnut industry. Currently, Xinjiang not only produces more than half of the country’s walnuts, but its walnuts are known for their large size and high conversion ratio. Industry sources indicate that Xinjiang walnut varieties have a much higher kernel content than their counterparts in other walnut-producing countries. However, very few local walnut varieties compete with popular global varieties such as Chandler from the United States and Chile that feature lighter kennel color and less bitter taste.

    Chinese walnut production was not affected much by the COVID-19 outbreak that interrupted farming activities and road transportation for other agricultural products. Specifically, the MY2020/21 walnut harvest began in early September after C-19 restrictions had been lifted and those walnuts grown in mountainous regions do not require ongoing care prior to harvest

    Almonds

    According to industry sources, China’s shelled almond production is forecast at 45,000 MT in MY2020/21 (August-July), unchanged from the previous year due to normal growing conditions. Shache county in southern Xinjiang produces more than 95 percent of the country’s almonds.

    Almond acreage has stabilized at around 63,000 hectares from the rapid expansion over the past few years, which was encouraged by the local government. However, almond yield has been low in the absence of proper crop management and agricultural inputs. In addition, Xinjiang almonds cannot compete with popular varieties such as Nonpareil. Therefore, almonds produced in Shache are exclusively sold within Xinjiang.

    Pistachios

    According to an industry report, China’s pistachio production (in-shell basis) is forecast at around 500 MT in MY2020/21 (September-August). According to industry sources, not many pistachio plantings are bearing fruit and yield remains low due to a lack of proper farming technology. Most pistachios are planted in southern Xinjiang for experimental purposes by private companies. It will take some time before suitable locations and varieties are identified for the Chinese pistachio industry.

    Other nuts – Macadamia, Hazelnut, and Pecan

    According to data released by the International Nut and Dried Fruit Council (INC), China’s Macadamia nut production (in-shell basis) is forecast at 30,400 MT in MY 2020/21 (September-August). INC forecasts the country’s shelled macadamia nut production at 5,000 MT in MY 2020/21. China’s macadamia nut industry is developing quickly. Industry reports indicate that planted area, currently estimated at 240,000 hectares, is projected to reach 300,000 hectares by 2030. Macadamia nuts are planted primarily in mountainous areas of Yunnan province and on the plains of Guangxi. Guangdong is reportedly increasing the size of their macadamia nut plantations.

    Hazelnut production (in-shell basis) is forecast at 40,000 MT in MY 2020/21 (September-August), including 10,000 MT of hybrid varieties (similar to European varieties) and 30,000 MT of wild varieties (much smaller in size), according to an industry report. The planted area of commercially cultivated hazelnuts (hybrid varieties) is estimated at 80,000 hectares, mainly located in Liaoning, Heilongjiang, Jilin, and Shandong provinces. The area of wild hazelnut species is estimated at 75,000 hectares, spreading in mountainous and hilly areas across northeast China (Heilongjiang, Jilin and Liaoning) and north China (Shandong, Inner Mongolia, Hebei, and Shanxi).

    Pecan production (in-shell basis) is forecast at 1,000 MT in MY 2020/21 (September-August), doubled from the previous year on increased bearing, according to an academic report. The country’s pecan acreage, which is currently estimated at nearly 67,000 hectares, has expanded quickly in the past few years in Yunnan, Anhui, and Jiangsu provinces. Pecan plantations are also spreading into other provinces including Shandong, Zhejiang, Jiangxi, Hunan, and Guangxi, according to the report. Most pecan orchards have not entered the stage of bearing. It is too early to predict whether China will become a major pecan producer. 

    Prices

    As the new marketing year has just begun, farm gate prices for in-shell walnuts are quoted at RMB 13.5 ($1.98) per kilo in Yunnan, the second largest walnut producing province, down more than 20 percent from the same period of last year, according to Yunnan walnut traders. China’s walnut prices have gone down in recent years as production keeps increasing. The outbreak of Covid-19 in early 2020 has put additional downward pressure on walnut prices due to slow movement of stocks following the closure of wholesale/wet markets and processing facilities.

    Consumption

    Tree nut consumption has continued increasing in tandem with rising incomes and a growing health consciousness among Chinese consumers. Per capita disposable income increased by 8.9 percent in 2019, according to the National Bureau of Statistics. Tree nuts, known for their nutritional benefits, are consumed on more occasions such as during travel, at tea breaks, and as meal replacements. However, the outbreak of Covid-19 in January 2020 seriously affected offline tree nut sales following suspension of processing facility operations, closure of retail outlets, and missing of social activities, including travel, gatherings, and gifting giving.

    As the pandemic situation has improved in China, tree nut consumption is expected to recover. A national health survey reports that the pandemic has enhanced the importance of a healthy diet in people’s lifestyle. Consumer research indicates that young professionals, a target audience for the product, view tree nuts as healthy and nutritious. Meanwhile, many nut manufacturers have stepped up their marketing efforts. New products such as cereals, probiotics, and cookies have emerged on the market and manufacturers have developed nut products with new flavors such as herb and green tea. As a result of these marketing efforts, tree nut consumption will likely expand.

    Trade

    Import

    China’s tree nut imports declined in the first half of 2020 due to the Covid-19 outbreak across the country that led to reduced buying interests and a disruption in logistics. The tree nut prices on the world market also fell significantly due to weak demand. Tree nut imports are expected to pick up in MY 2020/21 as economic and social activities resume in China.

    China’s pistachio imports are likely to increase in MY 2020/21 (September-August) on anticipation of greater available supplies from the United States and the tariff exclusion process put in place since March 2020 (see Policy). If so, the United States could regain the seat of being China’s largest pistachio supplier as sources expect the crop from Iran to drop by 15 percent this year.

    Similar to the pistachio situation, China’s almond imports from the United States are expected to rebound in MY 2020/21 (August-July) in anticipation of a bumper harvest, record low U.S. almond prices, the implementation of a tariff exclusion process and an improved pandemic situation in China.

    Walnut imports will continue to decline in MY 2020/21 (September-August) on increased local production. The United States remains the largest walnut supplier to China even though the volume has been declining since 2012 when local production started to boom. The retaliatory tariffs effective since April 2018 have made U.S. walnuts even less competitive. The market share of Chilean walnuts is quickly catching up, taking advantage of a bilateral Free Trade Agreement.

    Export

    China’s walnut exports are forecast to continue increasing moderately in MY 2020/21 (September- August) given much lower local prices. Although some buyers have reportedly postponed their purchase orders in the wake of the Covid-19 outbreaks, demand is expected to gradually recover, according to Chinese walnut processors. China has quickly become a major walnut supplier on the world market since its production jumped sharply in MY 2017/18. China exported more than 122,000 MT of walnuts (in-shell basis) in 2019, an increase of more than 240 percent on a yearly basis, according to China Customs data. The country exports mainly in-shell walnuts to Kyrgyzstan, Turkey, and Pakistan. Shelled walnuts are shipped to Kyrgyzstan, Russia, and Japan.

    The export volume of Chinese macadamia nuts is on the rise. China’s exports of macadamia nuts have shown a consistent upward trend with MY 2020/21 forecast to reach 4,000 MT (in-shell basis). Australia remains the single largest buyer of Chinese shelled macadamia nuts, while the United States has outpaced Japan typically the second largest buyer, of in-shell macadamia purchases.

    Policy

    China’s State Council Tariff Commission (SCTC) announced a reduction in the retaliatory Section 301 tariffs on U.S. agricultural products as of February 14, 2020 (see GAIN report CH2020-0016). As a result, the import tariff collected on U.S. tree nuts would be lower (see table below for details). In addition, the SCTC launched a tariff exclusion process on March 2, 2020 where importers could apply for tariff exclusions on specific consignments from the United States. If an exclusion application is successfully approved, the Section 301 tariffs imposed on U.S. products, including certain tree nuts, would be exempted for a year from the date of approval (refer to GAIN report CH2020-0017).

    Marketing

    Tree nuts defy the economic downturn in 2020

    The China Native Foodstuffs Association in its 2019 China Tree Nut Industry Report estimated that the consumption of snack foods will reach RMB 1.2 trillion (U.S. $177 billion) by the end of 2020. Tree nut consumption accounts for 15 percent of the snack food category. Tree nuts are the fastest growing snack in China compared to traditional snack foods. Tree nuts are regarded as a heathy option as more customers seek to reduce their starch and sugar intake. Sources indicate that tree nuts are likely to gain market share from snacking alternatives including puffed or extruded foods, confectionary items, and preserved snack foods.

    The Covid-19 outbreaks effected retail sales of tree nut products, however e-commerce platforms showed strong demand for tree nut purchases. For example, one of China’s largest tree nut processors and retailers, which operates a large online presence reported 16.4 percent year over year revenue growth during this period.

     Competition

    In the past 30 years, the tree nut marketing industry in China has transformed from regional brands and regional trade, to fierce national competition in online and offline formats. South China remains an important distribution point for primarily imported tree nuts, while large snack food companies have developed in East China. The five largest national tree nut snack brands include: Be & Cheery (Zhejiang Province), Three Squirrels and QiaQia Foods (Anhui Province), Bestore (Hubei Province), and Wolons (Shandong Province).

    National tree nut snack brands in China compete in their product mix and distribution channels. E- commerce accounts for an overwhelming percentage of sales for the top Chinese tree nut companies. Tree nuts are either sold as sole product lines or incorporated in dried fruit or candy packaged product lines.

    Consumers

    According to industry research, 26 – 35-year-olds make up around 56 percent of tree nut consumers. This group has high disposable income, interest in diverse foods, and a high repurchase rate.

    While most popular in first and second tier cities, tree nut sales have grown in third and fourth tier cities as consumers increasingly adopted, and companies expanded, e-commerce sales platforms amid the Covid-19 outbreak. The use of e-commerce platforms in these third and fourth tier city markets increased about 21 percent since 2018. The same demographic of tree nut consumers is also most likely to use e-commerce, and, those in third and fourth tier cities tend to spend more than the average Chinese consumer, providing expanded opportunities for tree nuts.

    Innovation

    Food offerings in China thrive on variety. Research and development in the tree nut industry follows two major trends: variety of flavorings on the same tree nut and optimizing nutrition and storage. Nut companies are increasingly identifying market segments and producing products tailored to that segment. For instance, nuts or nut mixes specially packaged or mixed nuts for breakfast, the gym, or the office and to fulfill consumer needs for pregnant women, people on diets, and office workers.

    Bakery consumption booms

    Imported tree nuts are also used in the Chinese baking industry which has grown by double digits in recent years. The bakery sector in China commonly uses U.S. almonds, walnuts, pecans and pistachios as ingredients in bakery chain breads, cookies, cakes and pastries. The mid-Autumn Festival (October 1-8 in 2020) is peak season for sales of moon cakes; in 2019 moon cake sales reached 19.6 billion RMB (U.S. $2.8 billion). These dense, filled pastries have seen filling innovations in recent years, and tree nuts are a trendy alternative. U.S. tree nut producers could consider research and development cooperation with moon cake producers to expand this seasonal trend in China. — By Alexandra Baych, USDA Foreign Agricultural Service

  • Selecting the ‘Right’ Walnut Rootstock

    Walnut rootstock options were historically seedlings, either Northern California Black (Juglans nigra), or Paradox (a cross between English Walnut, Juglans regia, and Northern California Black). Those two options still exist, but as research and technology advances in walnut cloning, clonal rootstocks are becoming more available. With this new advancement, growers have questions. Hopefully, I can  provide some answers.

    What is the difference?

    There is a large difference between clonal rootstocks and Paradox seedlings. This is due in part to the genetic variability, or genetic differences, in Paradox seeds. UC/UCCE/USDA Walnut researchers, specialists, and farm advisors studied the genetic background of Paradox seedlings and found high variability from one seed to the next. This means that each seed is different from the next one. One seed might be more vigorous, one seed might be  more susceptible to phytophthora , one seed might encourage more seed production, while another encourages more leaf and branch growth. This leads to a highly variable stand of trees in an orchard. Clonal rootstocks, on the other hand, are cuttings of the same plant. Walnut varieties are a good example of this process, as every Chandler tree in California came from one single mother tree which was originally produced by a seed. Much like how every Chandler tree tends to produce the same nut (some differences do develop depending on the growing conditions), every RX1 clonal rootstock will develop similar characteristics in the tree. Therefore, a Chandler orchard on a clonal rootstock tends to be more uniform in growth than an orchard on Paradox seedlings.

    What is the RIGHT choice?

    I honestly cannot think of a single “right choice” in agriculture, there’s just options. Options are nice, but they can also be confusing. Here is some background information that might help the decision in the future. RX1 and VX211 are both UC selections,  chosen from acres of single seedling crosses based on their potential benefits. These were developed as a part of the Paradox diversity study done by UC/UCCE/USDA researchers, specialists and farm advisors. RX1 appears to show some tolerance to Phytophtora, a root infecting fungus like organism, but if disease pressure is high, the rootstock may still succumb to Phytophthora. VX211 was selected based on its potential tolerance to some nematode populations, but again, much like RX1 and Phytophthora, if nematode pressure is high, VX211 may still succumb. Both RX1 and VX211 were field tested against a handful of other selections as well as Paradox and Vlach. Vlach was developed by a private party which originated from a Paradox seedling tree in our very own county of Stanislaus. The tree was selected based on its high level of vigor.

    Are any commercially available walnut rootstocks resistant to crown gall?

    Short answer: no. Long answer: Paradox seedlings, RX1, VX211, and Vlach can all be infected with the causal agent of crown gall (Agrobacterium tumefaciens) and develop galls. YET the production of clonal  material AVOIDS many opportunities for infection. Paradox seedlings are collected from the field as walnut seeds. Previous UC/UCCE/USDA research (funded in large part by nurseries) demonstrated that Agrobacterium  tumefaciens is picked up from the ground in seed orchards. Nurseries funded this research to find ways to make their production better and have since developed ways to reduce crown gall in new Paradox  seedling  rootstocks  by  incorporating the use of tarps or catch frames. That said, Paradox seedlings are highly susceptible to Agrobacterium tumefaciens and clonal material skips this field collection step. Please be advised that orchards on RX1, VX211, and Vlach still require proper sanitation, ie,  cleaning pruners/loppers with 10% bleach solution or 70% ethanol and avoid wounding  the crown, trunk, and roots during planting and other practices.

    Are these our only options?

    When excluding Blackline (please see my summer 2019 issue for further information http://cestanislaus.ucanr.edu/newsletters/ Walnut_News_-_Fruit_For_Thought80737.pdf), for now, yes, but not forever. The California Walnut Board in combination with the US Specialty Crop Research Initiative is currently funding ongoing research in the breeding and development of future rootstocks. We are looking at three to four selections for various reasons, one of  which being resistance to crown gall. These rootstocks are being field tested now and will  be made available in the future provided they prove themselves worthy, in other words capable of producing a good crop.— By Kari Arnold Ph.D. UCCE Area Orchard and Vineyard Systems Advisor, Stanislaus County

  • California Walnut Industry Gears Up To Market Record Crop

    On August 28, USDA NASS released the Objective Measurement of the 2020 walnut crop at 780,000 short tons, an increase of 19% over the prior year. “The industry has been expecting increases given continued growth in new acreage, more densely planted orchards, and heavier yielding varieties and has planned accordingly,” stated grower Robert Driver, California Walnut Commission (CWC) Chairperson. “Demand creation for future crop utilization has been years in the making, with the industry’s strategic plan focused on growing sales in the U.S. domestic market and internationally.”

    To take advantage of the large crop and continued demand, a tremendous growth opportunity exists in the U.S. market to expand all sectors of the walnut business across retail, food manufacturing/industrial and foodservice. “We have been planning for these larger crops by expanding consumption through all sectors,” said Michelle Connelly, Executive Director/CEO of the California Walnut Board and Commission (CWB/CWC). “Despite what you might think, per capita consumption of walnuts is only 0.6 pounds per year in the U.S., leaving an exceptional opportunity to further develop consumers’ love of walnuts.”

    Efforts are underway to expand grocery retail presence through two national promotional campaigns, which include a program focused on growing the snacking segment. “While walnuts are not often thought of as a snack, our consumers are telling us otherwise with snacking becoming our top consumer use,” said Jennifer Olmstead, Marketing Director, Domestic PR at CWB/CWC. “Our goal is to make walnuts top-of-mind, not only for consumers, but for food manufacturers and foodservice as well. Not only are walnuts a versatile ingredient that can’t be overlooked, they are a powerhouse of nutrition – offering essential ALA omega-3 (2.5 g/oz.) and plant-based protein (4 g/oz.) – with benefits that are critical to consumers who are seeking healthy, clean, nutritious foods now more than ever.”

    The domestic market offers advantages to the industry: proximity, stability and risk prevention from some of the turbulent times that recent tariff issues have created. However, the industry’s export markets remain vital to the industry’s growth strategy, accounting for more than 60% of annual shipment volumes. The industry has continued to adapt to tariff market challenges, while pursuing new markets for walnuts. Export market diversification has been key to this strategy, and continuing to find and develop export markets is essential.

    “We know we can further diversify the segments of business – similar to the U.S. with growth in food manufacturing and foodservice – while propping up our retail channel. Interestingly, COVID-19 has actually helped increase sales in the retail segment. Retailers and consumers increasingly embrace e-commerce, opening new avenues for retail promotion, while also bolstering the importance of neighborhood grocery, in many countries like Spain and India,” said grower Todd Ramos, CWC Market Development Committee Chairperson.

    Core export markets in Europe and Asia remain critical to the industry and, despite their once-perceived mature status, present excellent opportunity. “But we aren’t stopping there,” stated Pamela Graviet, CWC Senior Marketing Director, International. “With expanded programs in the Middle East, the industry has identified untapped potential among markets that traditionally heavily consume nuts and dried fruits. Global population projections predict that 30% of the world’s population by 2050 will be new mouths to feed; therefore, market research will continue to identify opportunity in new and established markets.”

    To encourage handler investment to grow the walnut market through individual marketing activities, the industry pursued credit-back authority through a marketing order. “We know that the development of new walnut applications is critical to our expansion of the walnut market, and handlers are already making investments, but this program is poised to take that to the next level,” stated grower William (Bill) Tos, CWC Executive Committee Chairperson. The program authority, if approved by a vote of the growers, would come into effect this 2020/21 season.

    At a time when consumers globally are seeking healthy foods more than ever, walnuts offer a multitude of benefits further demonstrated by nutrition research. “Thirty years of research has established walnuts’ heart health benefits and more. But as with all things, the evolution of science is changing rapidly, and that change is also driven by what is important to consumers – gut health, sleep quality, mental health and obesity. Our health research program continues to identify how walnuts can play a role in these important consumer public health issues, while offering a simple, convenient way to potentially improve overall health,” stated Jack Mariani, CWB Market Development Committee Chairperson.

    Investment in production research remains foundational to helping growers produce a better crop, protect against disease and improve orchard management practices, ultimately enhancing the sustainability of the industry. Post-harvest research continues to identify potentially exciting means to improve shelf life, best practices to help manufacturers incorporate more walnuts, by-product utilization and food safety.

    “Our objective has been and continues to be to keep demand ahead of supply. The industry’s investment, careful planning and foresight have set the stage for continued success,” Tos went on to say. Walnut production has doubled in the last 15 years, with new acreage reaching 380,000 with an additional 75,000 acres set to come into production. California walnut growers’ investment in the future will allow more consumers worldwide to enjoy the benefits of consuming walnuts.

  • Pacific Nut Producer September Issue

    PNP920
    PNP920

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    Contents of the September Issue:

    2020 Pistachios May Fall Short of 1 Billion Pounds
    Shipments Still Strong Compared to Last Year
    Protecting Young Trees from Herbicide Damage
    New Finding: White Latex Painting Doesn’t Help
    Retiring UCCE Tree Nut Farm Advisors
    Kurt Hembree, Allan Fulton, Rachel Elkins
    September Orchard Tasks
    Almonds, Hazelnuts, Pecans, Pistachios, Walnuts

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  • Driving Walnut Consumption Through Snacking

    California Walnut Board – Over 95% of Americans snack at some point throughout the day. When we saw snacking move into first place for the top usage for walnuts in our Attitude & Usage (A&U) study, we knew the time was right to capitalize on this trend. In May, we kicked off a campaign designed to showcase California walnuts as the ideal snack food.

    The campaign inspires consumers to snack better by focusing on the simplicity of snacking on a handful of walnuts. We aim to create further excitement around the campaign by engaging consumers and reminding them of the unique flavor profile walnuts offer for both sweet and savory snacking options by having them pick their snacking preference, Team Sweet or Team Savory.

    In May, we also began our partnership with former Bachelorette, Ali Manno, to create content that highlights the versatility of walnuts as a snack. Ali shared her favorite sweet and savory walnut recipes in a blog post and on social media. Audience reception of Ali’s posts was overwhelmingly positive, and the inclusion of her daughter in the content amplified her relatability. Many commenters expressed intent to make her walnut spreads and contributed to the #WalnutsSweetOrSavory conversation by sharing their snacking preferences. Coverage of Ali’s snacking story was recently posted on Women’s Health and was syndicated through both Yahoo! and MSN.

    In order to give our snacking campaign a timely hook to help break through the COVID-19-dominated media landscape, we conducted a nationally representative survey to learn more about how Americans’ snacking habits had changed during shelter-in-place restrictions, so we could better understand how walnuts fit in. The survey, conducted in partnership with Kelton Global, revealed that Americans are snacking now more than ever, with 49% snacking more now than before the pandemic began.

    At the same time, many snackers are turning to indulgent snacks as a source of comfort, with 31% saying their new habits have led to recent weight gain. We leveraged these results in our outreach, with walnuts being the perfect snack ingredient that can pair with nearly any flavor, highlighting California Walnuts’ research that has shown walnuts may play an important role in maintaining a healthy weight. We also shipped mailers full of new and innovative walnut-packed snack products to media and health practitioner contacts.

    To capitalize on the increased use of digital media during this time, the campaign continues to be supported with snacking-themed digital ads and social media posts driving consumers to walnuts.org to engage with the campaign landing page, recipes, and blog content. The effort was further amplified via content marketing placements with print and digital partners, such as the Kitchn article “Berry Walnut Trail Mix Is the Afternoon Snack You’ve Been Waiting For” and Men’s Health “Make Walnut Energy Balls for a Snack”. Articles like “Summer Snack Hacks to Make the Long Days Simpler” on our blog rounded out the plan. Social media ads and polls encouraged consumers to join the conversation, resulting in high engagement levels.

    Editorial content from the blog and promotional landing pages have pulled visitors into the site with 70K+ clicks through the end of June, and more than 45K+ Recipe/Collection views.

    With consumers shopping for groceries online at record levels, California Walnuts launched an ecommerce digital advertising program on Kroger, Amazon, Instacart, Albertsons, Safeway and Ahold for the months of July and August. Additionally, traditional retail promotions will bring the campaign to life in September with snacking-themed promotions at Publix, Kroger, and Harris Teeter. Display shippers at 3,000 locations will encourage customers to “Grab a Handful of Nutrition” with California Walnuts.

    Looking ahead, we plan to continue building upon our campaign’s momentum by discovering new ways to reach consumers and share the many reasons California walnuts are not only the ideal snack food, but also the perfect ingredient for sweet and savory snack creations.