Pacific Nut Producer Magazine

Category: Walnuts

  • Treatment Options for Management of Walnut Scale and Frosted Scale

    Walnut scale (Figure 1) is an important economic pest of walnuts in California. High populations of walnut scale may affect tree vigor as well as predispose trees to diseases caused by several plant pathogenic fungi and possibly flatheaded borer damage. Historic UC Pest Management Guidelines emphasize the efficacy of insecticide applications at the crawler stage of insect development (late April to mid-May); however, with the introduction of new pest management tools such as insect growth regulators (IGRs), new studies have been conducted to evaluate the efficacy of these products at earlier times during the insect lifecycle. Both walnut scale and frosted scale overwinter as immature nymphs; therefore delayed-dormant application of IGRs has the potential to inhibit maturation and subsequent reproduction of these pests.

    In 2023, UC ANR and UC Berkeley researchers initiated a new collaborative study investigating the efficacy of four products applied at various rates and times (Table 1). Two insect growth regulator products, Esteem® (IRAC Group 7C) and Centaur® (IRAC Group 16), were included in the study, with both delayed-dormant (February 8, 2023) and crawler-stage (April 26, 2023) application timings. Centaur® was also investigated at two rates. Crawler-stage applications of Senstar® (a combination of spirotetramat and pyroxifin) and Assail 20SG® (a neonicitinoid) were also included in the study.

    Delayed dormant IGR applications inhibit maturation of walnut and frosted scale. Delayed-dormant application of Centaur WD® at either 34.5 oz/acre or 46 oz/acre reduced walnut scale survival by 81% of that of untreated control treatment by April. Both Esteem and Centaur reduced populations of mature frosted scale observed in late April by the over 85% of that on untreated trees (Figure 2).

    Crawler populations affected by IGRs and conventional insecticides. All treatments suppressed the rates of crawler emergence over time in comparison to the untreated control (Figure 3); however, delayed dormant applications of both IGR treatments (Centaur® and Esteem®) resulted in the highest suppression of the first-generation curve (Figure 3). Both rates of Centaur® applied during the delayed dormant period resulted in similar suppression of crawler emergence. Crawler stage application of Centaur® at the higher rate resulted in similar levels of crawler suppression as the delayed dormant IGR treatments (Figure 3). Moderate suppression of first-generation crawlers was observed with crawler stage treatments with the low Centaur® rate, Esteem®, and Assail® 30SG (Figure 3). Crawler stage application of Senstar® suppressed first-generation crawler emergence (Figure 3) and resulted in modest suppression (45%) of total crawler populations across the season as compared to the untreated control (Figure 4). All IGR treatments, regardless of the rate or timing, performed similarly with regard to total crawler populations across the season (Figure 4). The range in total crawler suppression across treatments of similar statistical significance was 88.2% (Centaur, 46 oz/acre, delayed dormant) to 54% (Assail, crawler stage), illustrating the variability in crawler counts in the orchard system (Figure 4).

    Summary. Delayed dormant applications of either of the insect growth regular products, Centaur® or Esteem®, offer excellent suppression of walnut scale and frosted scale populations. Delayed dormant applications may offer similar efficacy at lower product rates due to the opportunity to achieve better coverage prior to leaf-out.  Additionally, delayed dormant applications of these products may inhibit maturation of nymphs into adults, thus limiting sexual reproduction and subsequent laying of eggs.

    In prior studies, the efficacy of crawler stage Assail® application became apparent the year following application. Based on this background information, the populations of adult walnut scale will be evaluated across all treatments in April 2024 to fully capture the efficacy of these products over time.

    Additionally, future studies are planned to further determine the value of dormant versus delayed dormant applications of IGR treatments for management of walnut scale. The results of the current study, however, do demonstrate a need for updating the current UC IPM guidelines for management of walnut scale.  To date, the UC IPM guidelines only recommend crawler-stage applications of IGR products while the current study demonstrates the value of IGR applications earlier in the season. — By Elizabeth Fichtner, Mel Thayer, and Robert Van Steenwyk (UCANR)

  • State of the California Walnut Industry with Robert Verloop

    The California walnut industry has suffered tremendously in recent years due to many factors outside of the grower’s control.  But the future is not all doom and gloom.  In fact, the quality of this year’s crop was outstanding.  Watch this brief interview with Robert Verloop, CEO of the California Walnut Board & Commission, as he shares some highlights from his State of the Walnut Industry address at the Malcolm Media’s recent Tree & Vine Expo in Turlock.

    Please thank this video’s sponsor Thunder Creek Equipment for their industry support.

  • Diamond of California® and Nature Nate’s Honey Co.® Debut Hot Honey Snack Walnuts

    Diamond of California®, the century-old producer of specialty nuts, and Nature Nate’s Honey Co.®, the number-one branded honey company in the U.S. and producer of 100% pure, raw & unfiltered honey, announce today the launch of Hot Honey Snack Walnuts. The two brands have fused their expertise in walnuts and honey to create the perfect sweet and spicy superfood snack. They are available now online and coming soon to stores nationwide over the next several weeks. (SRP: $3.99/4oz. bag)

    The new Hot Honey Snack Walnuts highlight Diamond’s California-grown walnuts, which contain protein, fiber, and ALA Omega-3, lightly glazed with Nature Nate’s Hot Honey, 100% pure honey infused with chili peppers. Hot Honey joins Diamond’s four additional Snack nut flavors including Salted Dark Chocolate, Himalayan Pink Salt, Sweet Maple and the recently launched, Pecan Pie Snack Pecans.

    “As we continue to expand our snack nut line, we are taking a thoughtful approach to new flavors and making conscious effort to use real ingredients,” said Craig Tokusato, Chief Marketing Officer of Diamond of California®. “Nature Nate’s was a natural fit as a collaborator on this new flavor because similar to Diamond, they are a category leader that sets the standard with the quality of their products. We are excited to fuse our two specialty products, walnuts and hot honey, into a superfood snack that is sure to add a kick to snack time.”

    “Nate’s Hot Honey is made with pure honey and infused with just the right amount of spice. Adding our award-winning product to Diamond’s premium walnuts was a fun and authentic collaboration,” said Nathan Sheets, President and CEO of Nate’s. “We are proud to team up with Diamond of California® to deliver this innovative and delicious snack that stays true to our mission to provide families with more ways to enjoy the benefits of pure honey everyday.”

    Hot Honey Snack Walnuts are now available online via shop.diamondnuts.com and coming soon to major retailers like Albertsons, ShopRite and Amazon replacing a previous Hot Honey recipe sold in yellow packaging. For more information on Diamond of California®, visit their website or follow @DiamondNuts on Instagram and Facebook.

    About Diamond of California®

    Diamond of California®, the century-old producer of specialty nuts, has worked with walnut growers since 1912, making the company one of the earliest pioneers of the farm-to-table movement. The company packages fresh walnuts, almonds, pecans and other culinary nuts in whole, sliced, diced, and chopped forms. Their most recent innovations, Ready-to-Use Nut Pie Crusts and Ready-to-Eat Snack Walnuts & Pecans, can be found in the baking and snack aisles respectively. Headquartered in Stockton, California, Diamond of California® is located in the state’s heartland, where most of its orchards lie. Diamond of California® believes that nuts make good food even better. That’s why they’ve offered fresh, high quality and great tasting nuts that are truly made for homemade, for over 100 years.

    About Nature Nate’s Honey Co.

    Since 1972, Nature Nate’s Honey Co. has been dedicated to offering honey as nature intended – 100% pure, raw & unfiltered. Arriving in its most natural form, this honey is closest to its original provision from the hive. Nate’s adheres to strict quality-control standards, sourcing honey from trusted beekeepers and minimally processing it to ensure the honey retains all its natural benefits. Nate’s promises an undivided commitment to providing the highest-quality product to you and your family’s dining table – a farmer’s market quality honey, available year-round. For more information about Nate’s visit their website.

  • Minimize Potential Sudden Autumn Freeze Damage in Walnut

    Damage from a sudden autumn freeze can occur when trees experience freezing temperatures prior to going into dormancy. With sudden autumn freeze damage occurring in three of the last five years, preparing for these freeze events needs to be a regular part of every walnut grower’s summer and fall orchard operations. The best approach to escape damage from a fall freeze is to have frost alarms ready and turned on by October 15, completely rehydrate trees after harvest, and actively irrigate during frost events.

    Left: Withhold irrigation until a terminal vegetative bud sets on the trunk. Right: After a severe freeze event cut into the southwest-facing trunk, looking for dark brown discoloration of the cambium. (Photos: Janine Hasey)

    Steps to prepare:

      1. Tender new growth is most vulnerable to freeze damage: prevent trees from pushing late-season growth by cutting off N applications by mid-August (young trees) or early September (mature trees).
      2. For young trees, withhold irrigation starting in early to mid-September, waiting to resume irrigation until after a terminal bud (left photo) is set on the trunk. After the terminal bud has set, resume irrigation to avoid tree stress and defoliation. For bearing trees, terminal buds usually set as a side effect of the water cutoff done ahead of harvest.
      3. Keep groundcovers cut to 2 inches or less starting in mid-October. This allows sunlight to reach the soil surface, storing heat for a warmer orchard through the night.
      4. Rehydrate trees immediately after harvest, and actively monitor soil moisture and freeze predictions (usually from mid-October through December) until trees are acclimated to frost (see note below). Trees with adequate soil moisture are better able to withstand low temperatures without damage than trees in dry soil. This is because water-filled spaces in the soil conduct and store more heat than empty airspaces. If a freeze is predicted and the soil is dry, it should ideally be wetted 2 to 3 days before a freeze event. Light irrigation to moisten a dry soil surface the morning before a frost will help obtain the greatest heat storage for re-radiation at night (if there is no ponding going into the freeze event).
      5. Some growers with the ability to actively irrigate during sudden autumn freeze events have reported great success in preventing damage. We know from work in almonds that active frost protection can achieve as much as 4 degrees of warming with solid set, 1-2 degrees with micro-sprinkler, and maybe even some benefit running a drip system.

    When do you no longer have to worry about preparing for the next freeze?

    Fully dormant mature healthy trees can tolerate temperatures to the low 20’s (°F) or below. We believe walnuts acclimate by having the first mild frost events in autumn with lows near or just below 32° F. However, we do not know how many mild freezes are required to acclimate trees in autumn. If the soil is dry ahead of the third, fourth, and maybe additional freeze events – it’s better to irrigate and be safe if you can do so. In addition, consider keeping up your freeze response program longer into fall or early winter for younger orchards with lots of current season’s growth.

    If you suspect freeze damage occurred, cut into the branches shortly after the freeze event and check the tissue for drying or browning (right photo). Sunburn after freeze can further damage tissue on the southwest side of the tree. Paint the southwest side of damaged trees with 50% diluted (1:1 water to paint) white interior latex paint. Painting up to a week after the freeze event can reduce additional damage by half or more. You can learn more about freeze recovery in our article 2020 Walnut Freeze: Road to Recovery.

    — By Luke Milliron, UCCE Farm Advisor Butte, Glenn, and Tehama Counties; Jaime Ott, Orchard Systems Advisor, Tehama, Shasta, Glenn, and Butte Counties; Janine Hasey, UCCE Farm Advisor Emerita; and Joe Connell, UCCE Farm Advisor Emeritus

  • Introducing a Butte County UC Walnut Variety Trial

    A ten-acre Butte County Walnut Variety Trial was planted at the Chico State Farm in May of this year. A collaboration between Chico State, UC Davis Walnut Improvement Program, and UC Cooperative Extension, this variety trial aims to identify new varieties that will perform exceptionally well in this region. The orchard is being managed using conventional practices that are currently industry standard for Chandler production. Eighteen new selections developed by the UC Walnut Improvement Program are planted in the replicated trial, along with Solano, Wolfskill, Howard, and Chandler. All trees are planted on RX1 rootstock on a 26’ X 26’ spacing with micro-sprinklers. The selections were chosen for qualities including kernel color and size, yield, blight ratings and late flowering dates in preliminary greenhouse and small plot field trials. Early bearing, long-term yield and nut quality, resistance to and avoidance of walnut blight, as well as heat tolerance will be monitored over the next several years.

    Generous support from the Walnut Board of California, Sierra Gold Nurseries, Crain Ranch, M&T Chico Ranch, and the staff and management at the CSUC University Farm made this project possible. Additionally, the variety trial was recently awarded funding by the CSU Agricultural Research Institute, which will support ongoing field operations, student involvement and training on the farm, and data collection and testing in the field. We will provide periodic updates on the progress of the variety trial and host field meetings in the years to come, but if you’d like to learn more please contact Clarissa Reyes, Orchards Farm Advisor based in Yuba/Sutter Counties at: clareyes@ucanr.edu or Becky Wheeler-Dykes, Orchard Systems and Weed Ecology Farm Advisor based in Glenn County at bawheeler@ucanr.edu.  — By Becky Wheeler-Dykes, Orchard Systems and Weed Ecology Farm Advisor, Glenn, Colusa, and

    Tehama Counties

  • Turkey Expects Lower Pistachio & Hazelnut Crop This Year

    The “off-year” for production will push Turkey’s pistachio production lower in Marketing Year (MY) 2023/24. The production of almonds and walnuts is forecast slightly higher but hazelnut production is expected to go down. Even though domestic tree nuts production continues to grow, Turkey is projected to import sizeable volumes of almonds and walnuts in MY 2023/24 to meet steady consumer demand. Imports of U.S. tree nuts continue to be disadvantaged by a 10 percent retaliatory duty, which Turkey imposed after the United States levied Section 232 tariffs on Turkish steel and aluminum. However, despite this additional tax and growing competition, the United States is still the one of the top suppliers of walnuts and almonds to Turkey.

    Pistachio Production

    Turkey’s pistachio production in Marketing Year (MY) 2023/24 is forecast at 160,000 metric tons (MT). Production volumes will decrease compared to the previous MY since MY 2023/24 is considered an “off-year” in the production cycle for pistachios. Still, production will not be as low as some of the earlier off-years. Production will be buoyed by an increase in the number of bearing trees. According to the Turkish Statistical Institute (TurkStat), there were an estimated 58 million bearing pistachio trees at the beginning of the current marketing year, up nearly 5 percent from last year. There are also about 25 million non-bearing trees, which is about 7 percent higher than a year ago.

    A few large earthquakes in February 2023 struck the two largest pistachio producing provinces, Sanliurfa and Gaziantep. The Government of Turkiye (GoT) and market resources indicate that the earthquake had minimal effect on pistachio production in the area, though.

    MY 2023/24 pistachio production, which is mostly rain-fed, will also benefit from improved rainfall conditions during the 2023 spring. However, there were two large floods in March 2023 in Sanliurfa which adversely affected some pistachio trees. Sanliurfa also saw some frost over a few nights in April and May 2023. Farmers tried to protect their orchards by making big bonfires. According to market sources, this method protects some of the fruits from freezing, though not all of them. Since the effects of these adverse events is limited in area, the effect on total production is minimal.

    Pistachio growers continue to replace their older trees, some of which are more than 50 years old, with younger trees in hopes of improving yields and increasing profit margins. Younger trees are less affected by the periodicity. Market sources also indicate that planting of the Siirt variety, known to be less periodical, is also increasing, though the Antep variety is still dominant in Turkey.

    With improved farmer training over the last decade, growers now appreciate and understand the importance of planting male trees in their orchards. At the same time, market sources report that in recent years some farmers, who were looking for higher profit margins, stopped planting lentils, barley, and even wheat to start growing pistachio trees. The new trees and orchards being planted will help lift Turkey’s overall yields and production levels in the coming years.

    Pistachio yields and production levels can vary dramatically between on- and off-years. The average pistachio yield is around 4 kilograms (kg) per tree in on-years and around 2 kg per tree during off-years. However, periodicity effects on yield have decreased in recent years due to the reasons explained above.

    Pistachio production is widespread throughout Turkey, with 56 of 81 provinces growing pistachios, according to the Gaziantep Commodity Exchange (GCE). However, the two southeastern provinces of Gaziantep and Sanliurfa account for 80 percent of total production. The southeastern provinces of Adiyaman, Siirt, Kilis, Kahramanmaras, Mardin, and Diyarbakir account for another 15 percent of total production. The remaining five percent is thinly spread across the Aegean, Mediterranean, and Marmara regions, where production has slowly increased over the last decade.

    There are two main types of pistachios grown in Turkey, the Gaziantep (Antep) variety and the Siirt variety. Both are unique to Turkey and differ in size and shape compared to the pistachios grown in Iran and the USA. The Antep variety accounts for 85 percent of pistachios grown in Turkey. The Siirt variety makes up the remaining 15 percent of production; the Siirt variety is considered a higher- yielding variety than the Gaziantep variety.

    The quality standards for Turkish pistachios are directly related to the size of the nut. 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. Turkey’s production of high-quality pistachios is predicted to increase in the future with the increasing number of new trees.

    In recent years, to mitigate the natural “off year/on year” production cycle, pistachio growers have started using good agricultural practices, especially in parts of southeastern Turkey. With support from local universities and other institutions, farmers are gradually realizing that higher yields can be achieved with “good” soil conditions, better tree care, and irrigation. While the number of irrigated orchards has grown in the last few years due to abnormal drought conditions, only a fraction of total production is irrigated.

    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 pistachio yields in the Gaziantep and Sanliurfa provinces. The project, which is called “May you have abundant pistachios,” trains farmers how to properly care for their trees. The training focuses on improving pruning and trimming techniques, as well as better fertilizer and pesticide application practices. Farmers who have been trained under this program and applied these best practices have seen their yields triple. Meanwhile, universities in the major pistachio growing regions in Turkey have developed better production methods and plant protection measures to help farmers improve yields.

    Almond Production

    Almond production for MY 2023/24 is forecast to increase year-over-year to 24,000 MT. This projected increase is attributed to an increase in the number of bearing trees.

    The devastating earthquakes of February 2023 in the southeast region of Turkey affected Adiyaman and 10 other provinces. Adiyaman province is the largest almond growing region in Turkey, Kahta being the leading area of production. Market sources confirm the GoT’s assessment that almond production was not affected by the earthquake. Although there was a problem related to human resources in the immediate aftermath of the quakes due to evacuations, by the harvest these challenges were reduced, if not totally solved.

    In March 2023 there were heavy rains and floods also affecting Adiyaman. Sources indicate that there was some frost and hail in April and May which hindered yields this year in the localities where those weather patterns occurred.

    In line with past practice, the Chambers of Agriculture in Adiyaman and Kahta continue to press Turkey’s Agricultural Credit Cooperative Union (ACCU) to fix a higher purchase price for almonds and to set it earlier in the season. As of mid-September, though, ACCU has not yet set a purchasing price. Private traders use the ACCU purchase price as a benchmark in setting contract prices. The president of the Kahta Almond Producers Union indicated that a price needs to be announced and asked GoT to raise the customs tariffs, as he claims they have been gradually lowered in recent years. In August, the president of the Kahta Chamber of Agriculture declared that the purchase prices to be declared by ACCU should be a minimum of 50 – 55 TL/kg for inshell almonds, although that number was about 30 TL/kg in the previous harvest.

    Almond growers continue to plant new trees and break ground on new orchards in response to strong domestic demand for almonds and with support from the GoT’s various support programs. The GoT encourages producers to establish new orchards by allocating free land for 49-years, providing interest- free financing, and delivering general support payments to farmers. In 2020, the Turkish Ministry of Agriculture and Forestry (MinAF) published an investor guide on its website to assist investors looking to plant new almond orchards. (Note: the guide was taken down from MinAF’s website a year after publication.) The guide explained the technical and financial aspects of starting a 100-hectare orchard. The guide noted that a return on investment was to be expected after seven years.

    As a result of the aforementioned government support programs, and the attractive nature of the investment, the private sector has concentrated on planting new almond orchards in Izmir, Manisa, Mugla, Denizli, Sanliurfa, Canakkale, Adiyaman and Karaman provinces. The investments in new orchards, once fully realized, will increase almond production in the medium term.

    The district of Kahta within the Adiyaman province has been the leading producer of almonds in Turkey since 2016, according to the Kahta Union of Almond Producers. The group’s plan is to increase almond orchard acreage to 100,000 ha by 2023/24 in order to produce enough almonds to meet domestic demand. According to the Kahta Chamber of Agriculture, the district will reach its acreage goal as of MY 2022/23, though many of the newly established orchards still have large numbers of non-bearing trees. As for the Union’s production target, it seems unreachable for the time being.

    In earlier decades, MinAF has instituted special afforestation projects aimed at increasing the number of planted almond trees. While the number of planted trees has increased as a result of these projects, almond production has not significantly increased, since the trees were planted in marginal areas and were not carefully tended.

    Walnut Production

    For MY 2022/23, walnut production is forecast at 69,000 MT, slightly up from the previous year. Although the number of bearing trees increased, there have been droughts throughout the country from fall 2022 to spring 2023, and again in summer 2023. Spring 2023 saw excess rainfall, causing floods in several areas. There was also frost and hail damage seen in several areas of the country. Under the circumstances, production has remained stable.

    Walnut trees grow in almost every province of the country, but commercial walnut orchards are still a relatively new phenomenon in Turkey. The GoT has instituted various programs to increase commercial production, allocating free land for 49-years, providing interest-free financing, and delivering general support payments to farmers. This support has spurred farmers and others in the private sector over the last couple of decades to open new orchards throughout the country, including the Aegean, Marmara, southeastern Anatolia, and Mediterranean regions. However, even with these new orchards, the domestic production of walnuts is still inadequate to meet the growing demand of Turkish consumers.

    Over the last 20 years, MinAF has undertaken special afforestation projects, in an attempt to boost commercial walnut production. However, these initiatives did not yield the expected results since many of the trees were planted in marginal soils or unsuitable locations. Irrigation to these afforested lands is generally unavailable or too costly. In contrast, the newer commercial orchards are more successful since they use up-to-date techniques, and many have access to irrigation.

    Up until the last 10-15 years, there was not a standard walnut variety being grown in Turkey. However, as growers have come to appreciate that certain propagation techniques result in higher yields, the use of standard varieties has now become more widespread. Chandler is the most popular walnut tree variety. However, there is still a need for introducing higher-yielding varieties that are suitable for local growing conditions. Turkey’s leading walnut research establishment, the Yalova Horticulture Research Institute, is developing new varieties for commercial production in different parts of the country.

    The Turkish Walnut Producers Association (TWPA) was established in 2021 and held its first general assembly that summer. The association has about 30 members, who are all large, commercial growers by Turkish standards. As of 2022, association members collectively own 35,000-40,000 da of orchard land that is covered with 1 million trees. The Association’s members employ modern agriculture techniques on their mechanized commercial operations. The association aims to produce 20,000 MT, which is equivalent to about one-third of Turkey’s current production volumes, within the next 2-3 years. The association held Turkey’s first “International Walnut Conference” in September 2022, though as of August 2023 there are no signs that they will have a second one.

    As of June 2023, TWPA announced that they will establish a brand in order to better market domestic walnuts. TWPA has stated that it is very hard for small domestic producers to get onto shelves of supermarket chains, because organized retail chains demand a steady supply of large amounts of walnuts, and are therefore bound to sell imported walnuts which can be steadily supplied. In order to get market access to small domestic producers, TWPA is establishing a brand under their Turkish acronym, CÜD. This brand will pack walnuts inshell in net bags of 1 kg to be sold in supermarkets with the 2023 harvest season. As of mid-September, though, they are not in stores. TWPA claims domestic production is tastier than any imported walnuts and is presented to the consumers at a better quality since they are not fumigated.  Moreover TWPA is lobbying the GoT to increase customs tariffs to 43 percent, as they were before 2018.

    Hazelnut Production

    Note: USDA does not maintain a Production, Supply and Distribution for 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. Production in MY 2023/24 is forecast lower year-over-year at 600,000 MT. By comparison, TurkStat is predicting production will reach 730,000 MT and the Turkish Union of Chambers of Agriculture predicted 718,000 during this period before the harvest started. Market sources believe this number is too high, though. During the harvest, it is understood that yields were not as high as expected.

    Most years, the Turkish Grain Board (TMO) purchases and stores hazelnuts on behalf of the Turkish government. In the beginning of August this year, the President of Turkiye announced the official purchase price that TMO will pay for hazelnuts. The purchase price for Giresun quality hazelnuts is 84 TL/kg, almost double last year’s. The purchase price for Levant quality hazelnuts is 82.50 TL/kg, nearly a 60 percent increase compared to a year ago. Growers book appointments online to sell their hazelnuts to TMO. TMO pays the grower 21-days after receiving the hazelnuts in its warehouse. Since the actual crop was much less than predicted by GoT, the market price of hazelnuts surpassed these official prices reaching about 90 TL/kg quickly after harvest started, so not many were willing to sell their crop to TMO this year. TMO was advised to increase purchase prices if they wanted to stock hazelnuts on behalf of the GoT. In addition to TMO, the Union of Hazelnut Agriculture Sales Cooperatives (FISKOBIRLIK) sometimes purchases and stores hazelnuts to help keep domestic prices stable. As of September 15th, FISKOBIRLIK is purchasing the lowest quality Giresun variety hazelnut for 98 TL/kg.

    The largest single buyer of Turkish hazelnuts is Italy’s Ferraro Hazelnut Company, the owner of the Nutella brand. Ferraro is the biggest hazelnut trader in Turkey, buying about one-third of Turkey’s annual hazelnut export volumes. Ferraro’s announced purchase price is slightly lower than the TMO rate at 80 TL/kg as of September. Approximately half of Turkey’s hazelnut exports are handled by international companies, such as Ferraro.

    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 on the Black Sea coast) 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 million people directly or indirectly employed by hazelnut production in Turkiye on an area of around 725,000 hectares.

    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. Turkish hazelnuts usually mature 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.

    Read the full USDA-FAS report HERE

  • China Forecast on Tree Nut Production and Imports

    The USDA FAS (Foreign Ag Service) stationed in China forecasts commercial production of in-shell walnuts to remain unchanged from the previous year at 1.4 MMT (Metric Tons) in MY (Market Year) 2023/24. Cold winter temperatures in Xinjiang damaged the almond crop this year. FAS China forecasts almond production will drop sharply to 5,000 MT. Despite a slowed economy, solid demand and abundant global supplies of almonds and pistachios will encourage increased imports of these commodities. At the same time, retaliatory tariffs have reduced the market share of U.S. almonds and pistachios in China. There is demand for a limited volume of imported walnuts to supply a niche market.

    Production

    Walnuts

    FAS China forecasts commercial production of in-shell walnuts at 1.4 MMT in MY 2023/24 (September-August), unchanged from the previous year. Despite unusually cold temperatures in winter 2022, walnut production in Xinjiang, the leading producer, will remain at the same level of last year, according to local trade sources. In Yunnan, the second largest producer, traders reported that heat damage between April and May 2023 will reduce walnut production mildly. A severe frost also occurred in April in Shanxi, Shaanxi, and Henan during walnut pollination, which negatively impacted the crop, leading to a 10-20 percent production decline in these minor walnut producing provinces, according to local traders. However, media reported that walnut production will increase significantly in southwestern China, especially Chongqing municipality, offsetting crop losses elsewhere.

    The walnut acreage is stable for now but will possibly decline in the future because of over production. Industry sources indicate that the country’s actual walnut production is much larger than the commercial production because high labor costs in some areas, especially in the high mountains in Yunnan, leave many walnuts unharvested. In addition, traders report that farmers harvest walnuts from older trees in northern China. In Hebei province, for example, producers will crush the walnuts into oil for their own consumption rather than selling the crop. In addition, walnut farmers harvest around 10 percent of Chinese walnuts prematurely and sell them fresh (without the drying process) at various local markets.

    Walnut quality varies from place to place due to a variety of reasons as well as the level of attention that growers give them. Currently, walnuts are planted in 21 provinces, and each province plants its own varieties, none of which are comparable with the U.S. and Chilean varieties such as Chandler that are favored because of organoleptic properties such as their light (kernel) color and no bitter taste. In addition, many farmers do not take particular care of their walnut plants, most of which sit on mountain/hill slopes, given poor market returns. However, Xinjiang walnut growers have improved varieties that produce higher quality walnuts and grow walnuts on level fields that allow them to use mechanized farming to reduce labor costs and increase yields. Taking advantage of its geographic location, Xinjiang walnuts are the main source of Chinese exports.

    Almonds

    FAS China forecasts China’s production of shelled almonds to fall dramatically to 5,000 MT in MY 2023/24 (August-July) due to extremely cold temperature in Shache county of Xinjiang in January that damaged a large number of plants, according to local contacts. Cold temperatures in winter and spring have always been a challenge to almond production in Shache. Adverse weather has wiped out the almond crop twice before in Shache. Under normal weather conditions, Shache produces around 50,000 MT of almonds (shelled basis) a year. The Xinjiang almond yield remains low, largely because of less productive varieties. As a result, Shache almonds are mostly consumed within Xinjiang. Shache almonds growers produce more than 95 percent of Chinese almonds. The acreage has remained quite stable at

    around 60,000 hectares. Farmers in Henan province have reportedly planted some 530 hectares of almonds, but most plantings have not begun bearing and their performance remains to be seen.

    Pistachios

    China’s pistachio production is very limited. An industry report estimates the production at a mere 300 MT in MY 2023/24 (September-August). Farmers in Xinjiang province have reportedly planted around 1,300 hectares of pistachios to experiment with pistachio production in the province. It will probably take a while before farmers identify appropriate varieties and locations for pistachio production, if any.

    Other Nuts-Macadamia Nut, Hazelnut, and Pecan

    FAS China forecasts MY 2023/24 (September-August) production of inshell macadamia nuts at 57,000 MT, an increase of 36 percent from the previous year, according to a report by a major macadamia grower and processor in Yunnan. The production of macadamia nuts has doubled over the past five years in China, which is now the world’s third largest producer, according to statistics released by the International Nuts and Dried Fruit Council (INC). After a few years of rapid expansion, the planting area of macadamia nuts is stable at around 309,000 hectares. Yunnan province produced the most macadamia nuts in China, followed by Guangxi and Guangdong. Industry sources in Yunnan expect the country’s macadamia production to continue increasing in years to come as more plantings begin bearing.

    FAS China forecasts China’s production of hybrid hazelnuts (in-shell basis) at 60,000 MT in MY 2023/24 (September-August), an increase of 3 percent from the revised number in the previous year. An industry contact noted that the acreage of hybrid hazelnuts, currently estimated at 126,600 hectares, has increased quickly over the past 7-8 years in Liaoning, Jilin, Heilongjiang, Shandong, Inner Mongolia, and Hebei provinces. China is likely to see moderate increases in hazelnut production in the next few years as new plantings gradually start bearing fruit. However, crop yield remains quite low as some of the first hazelnut growers used inappropriate varieties when they first started planting. China also produces wild hazelnuts, and the annual production is quite stable at around 40,000 MT (in-shell basis). Wild hazelnuts grow mainly in Liaoning province, with smaller areas spreading in Jilin and Heilongjiang provinces.

    FAS China forecasts China’s production of in-shell pecans at 4,300 MT in MY 2023/24 (September- August) based on an industry report. Various sources have provided different pecan production numbers in China. Reports indicate that farmers in 8 provinces, led by Yunnan, Anhui, and Jiangsu, have planted around 83,000 hectares of pecans. Most plantings, however, have not begun bearing.

    Price

    Walnut harvest just commenced in Yunnan in September 2023. Yunnan is the second largest producer next to Xinjiang, where harvest activities will begin soon. The farmgate price for mixed grade walnuts (in-shell basis) are quoted at RMB 13 ($1.8) per kilo, slightly higher from a year ago, according to

    Yunnan traders who noted that walnut prices have dropped so much in recent years that some farmers will not even bother to harvest their walnuts.

    The world tree nut prices, except for pistachios, started to decline in 2022, largely because of weak market demand globally. The downward trend in prices of most tree nuts continued in the first half of 2023 and have almost reached five-year lows, except for macadamia nuts, according to a report presented at a recent tree nut conference. Traders predict that tree nut prices are most likely to stay at low levels in the remainder of this marketing year, due to abundant supplies.

    Consumption

    Increased consumption and more application of tree nuts in food processing will help tree nut consumption grow moderately in MY 2023/24. The rapid growth in tree nut consumption in recent years slowed during the pandemic. The anticipated rebound in consumption has not occurred after the removal of COVID restrictions in December 2022, largely because of weak economic performance. However, industry sources predict that nuts in meals, innovative nut products, and improved cost-effectiveness will be the three driving forces behind future consumption growth. For example, wasabi flavored macadamia nuts have greatly increased the consumption of this nut variety in China.

    Snacking remains the major consumption pattern for most tree nut varieties, but food producers are using increasing quantities of nuts, especially low-priced ones, in a wide range of food products. Plant based drinks that use tree nuts as primary ingredients are gaining popularity. In addition to traditional walnut milk, “daily nut milk,” which contains milk and various nuts, has gained in popularity among younger consumers. While food processors are actively seeking new applications of tree nuts in the culinary and baking sectors, processed products, such as nut oil for food consumption and skin care lotion, have become a new trend.

    The concept of tree nuts being a healthy and nutritional food keeps expanding among Chinese consumers, especially those in urban areas. However, industry reports indicate that per capita consumption of nuts in China is generally low and mainly seed nuts. The Chinese Food Guide Pagoda 2022 recommends between 25 grams and 35 grams of daily intake of beans and nuts, which food scientist have translated to 16-25 grams of nuts. However, daily consumption of nuts is around 10.3 grams in China, according to a presentation by a senior Ministry of Commerce official in August. On September 17, 2023, the China Nutrition Society released a White Paper on Nutrition, Health, and Nut Intake of Chinese Residents aimed to help consumers understand the health benefits of nuts and provide a scientific basis for mass education and the development of the nut industry.

    Policy

    Several U.S. products, including tree nuts, are still subject to a 15-percent retaliatory Section 232 tariff on top of MFN tariffs, despite being exempt from a 30-percent retaliatory Section 301 tariff on U.S. agricultural products since March 2020 (see GAIN report CH2020-0017). The following table provides a detailed breakdown of import tariffs and value added tax (VAT) on various nut products.

    The General Administration of Customs of the People’s Republic of China (GACC) published a protocol on inspection and quarantine requirements for almonds from Spain, officially granting access to Spanish almonds to the China market on April 20, 2023. INC statistics indicate that Spain is currently the
    world’s second largest almond producer, estimating Spain’s MY 2023/24 production (shelled basis) at 128,000 MT. Spain exports its almonds mainly to EU countries such as France, Germany, and Italy.

    All overseas tree nut manufacturers, processors, and storage facilities must register with the CIFER system before exporting food products, including tree nuts to the PRC, in accordance with Decree 248 (see GAIN report CH2021-0045). Decree 248 went into force on January 1, 2022.

    China has published the final version of the General Quality Standard for Nut and Seed Food, which took effect on August 1, 2023 (refer to GAIN report CH2023-0106). This is a recommended standard that provides terms and definitions, classification, inspection methods and rules, as well as labeling, packaging, transportation, and storage requirements for nut and seed products.

    Trade

    Imports

    China is a major importer of tree nuts and it relies heavily on the world market for supply of many varieties, especially almonds, pistachios, and pecans. Despite challenges such as a slowed economy and a strong U.S. dollar, industry contacts expect China’s overall imports of tree nuts to increase moderately in MY 2023/24, especially shelled products, driven by solid demand for healthy food products. In addition, global tree nut supplies, including production and stocks, will improve for most varieties in MY 2023/24, according to industry forecasts.

    MY 2023/24 (September-August) imports of both raw and roasted pistachios will be higher from the previous year’s level on solid demand for this popular product pronounced as “happy nut” in Chinese, as well as greatly improved world supplies. Both the United States and Iran are expecting a dramatic rebound in production in MY 2023/24, according to industry forecasts. The top two global suppliers lost a large portion of their pistachio crops in the previous year due to bad weather. It is worth noting that China’s imports of raw pistachios started to decline in MY 2021/22 but roasted pistachio imports have maintained rapid growth for five years. Industry sources estimate that the import volume of roasted products has now exceeded that of raw pistachios. The roasted products fall under a different tariff line that is not subject to Section 232 retaliatory tariffs (see Policy). The retaliatory tariffs against U.S. products have negatively impacted the imports of U.S. pistachios (see Chart 1 below). Starting in MY 2019/20 tariffs resulted in a cost savings for Iranian pistachios. While U.S. pistachios still have a significant market share, tariffs continue to weigh on U.S. export growth.

    China’s almond imports, shelled basis, will continue to increase in MY 2023/24 (August-July) because of abundant world supplies, lower prices, and dramatically reduced domestic production. Despite an estimated 43-percent reduction in the 2023 Australian crop, bumper harvests in California and Spain will likely improve world almond supplies. In addition, industry sources suggest that almond prices have declined since 2021, encouraging Chinese importers to buy more. Lastly, China opened its market to almonds from Spain, currently the second largest producer in the world, which may stimulate fresh almond imports. The United States remained the largest supplier of almonds to the Chinese market, but its market share has declined due to retaliatory tariffs (see Chart 2 below). The share of Australian almonds is quickly catching up, taking advantage of an existing bilateral free trade agreement.

    China’s imports of macadamia nuts will likely increase in MY 2023/24 (September-August) from strong demand for this popular nut, despite improved domestic production. As a result of significant decreases in price, the country’s imports of macadamia nuts soared by more than 40 percent in MY 2022/23, with Australia and South Africa being the two leading suppliers to this market.

    China’s walnut imports keep declining in the wake of increased domestic production. Chinese importers buy small quantities of inshell walnuts from Chile and shelled walnuts from the United States to accommodate the demand of high-end market for taste and color.

    Exports

    China is becoming a tree nut exporter, mostly of walnuts, as domestic production and food processing capacity improves. The devaluated local currency will also help boost the country’s nut exports in the short run. FAS China does expect China to export more walnuts in MY 2023/24 (September-August). As a result of increased domestic supplies, China’s walnut exports started to take off in MY 2020/21 and has kept increasing ever since. The main export markets (both inshell and shelled) lie in the Middle East, notably the United Arab Emirates, and Central Asia (e.g., Kyrgyzstan). The Russian market is also a strong market for shelled products.

    China’s exports of macadamia nuts have been increasing steadily in recent years, although volume remains relatively low. Australia and the United States are currently the top two buyers of Chinese shelled macadamia nuts.

    Marketing

    China’s per capita disposable income increased by over 5 percent in the first half of 2023 according to PRC statistics and consumption levels are following a similar trend. In the post-COVID environment, the food and beverage industry has emerged as the leading growth sector for Chinese consumption. Specifically, China’s snack food market is leading the growth. Key trends related to the growth of the snack food industry in 2023 include clean label products, nutritional snacks, diverse flavors, and convenient packaging. “Clean label” generally refers to products made with fewer ingredients, while ensuring the ingredients used are simple and well known. Examples are foods that are purely natural, low in sugar, low in fat, organic, free from food preservatives, and/or contain fewer additives. Nutritional snacks tout specific benefits such as rich in protein, vitamins, or fiber, and have a similar appeal. Diverse flavors and convenience packaging tend to entice the younger generation.

    Although different consumer groups have varying product preferences, nutritional value is by far the top factor influencing Chinese food and beverage purchases in the post-COVID environment. The best- selling items across all distribution channels are mixed nuts with dried fruit, small packages for individual consumption, and nuts with shells that are easy to crack. Specifically, China’s tree nut market has experienced significant growth. The market size has increased from $1.3 billion in 2005 to $6.2 billion in 2022. One tree nut snack category called “Daily Nuts,” which contains mixed nuts and dried fruits portioned in small bags, has become extremely popular. The “Daily Nuts” market size grew from $44 million to $1.5 billion in just 5 years.

    Tree nuts serve not only as a source of personal enjoyment but are also commonly shared in different settings, including tourism, urban camping, and family gatherings. Tree nuts are also a popular gift item.

    Consumers

    The rising middle class has emerged as the dominant social group in China with the urbanization that has occurred in recent decades. The primary consumers of tree nuts are individuals who belong to the middle-class or higher, young professionals employed in white-collar jobs, households with a greater amount of disposable income, and seniors residing in first and second tier cities.

    The trend of including “Daily Nuts” in everyday consumption in first tier cities (e.g., Beijing, Shanghai, Guangzhou, and Shenzhen) is increasing. It has become common for white-collar workers to order a cup of coffee along with a pack of nuts for breakfast. However, in smaller cities, the idea of consuming daily nuts is still in its early stages. Nuts are typically consumed during festivals, gatherings, or given as gifts in these regions. As urbanization and industrialization continue to boost income levels in these lower-tier cities, there is a significant potential for growth in snack consumption. Tree nuts are expected to play a major role in driving this growth.

    Market Players Competition & Sales Channels

    A series of city lockdowns in 2022 negatively impacted China’s economy and consumption patterns, leading to a 15 percent decline in the entire tree nut market size. Despite this setback, the market remains highly competitive, with over 300 snack food entities actively producing “Daily Nuts” and more players continuing to enter this lucrative market.

    The competition in the tree nut market continues to be fierce. The combined market share of the top five companies is over 12 percent. The top five companies are the following: Three Squirrels from Anhui Province, Huatai Foods (with the brand Cha Cha) also from Anhui Province, Be & Cherry from Zhejiang Province, Bestore from Hubei Province, and Wolong from Shandong Province.

    Nuts are available for purchase through various channels, including offline retail outlets and e- commerce platforms. Traditional channels include wholesale, hypermarkets, and wet markets. Snack specialty stores, supermarkets, community grocery stores, and convenient shops all carry tree nuts. E- commerce platforms have experienced tremendous growth in the past three years, partly due to the profound impact of COVID on consumer purchasing behavior. China accounts for over 50 percent of global online sales. Hybrid sales channels (i.e., online-to-offline) have become integral to building brand awareness for snack food companies looking to gain market share and diversify their clientele.

    New Trends

    The demand for healthy foods has also led to an increasing demand for plant-based products. Nut-based drinks are increasing in popularity. In addition, there are several innovative products in the market, including nut chips, which are often consumed as a yogurt topping. This new product caters to the growing interest in plant-based alternatives and offers a unique twist to traditional yogurt consumption.

    Yogurt drink mixed with nuts, a new drink found in the market, serves as the inspiration for this delightful addition. Made from a blend of fresh avocado, pecan chips, provide a crunchy texture and

    rich flavor when sprinkled over yogurt. Targeting the young generation and those focused on well- being fitness in affluent regions, this new product satisfies both taste and health preferences. — By Jadon Marianetti, USDA-FAS China Staff

  • 2023 California Walnut Industry Crop Estimate Released

    The USDA National Agricultural Statistics Service’s (NASS) official walnut industry crop estimate provides the California walnut industry with crucial information to support an orderly sales process. Using scientific methodologies, USDA field staff counted, measured, weighed and evaluated thousands of walnuts from major growing regions in July and August for use in a statistical acreage model to establish the annual walnut crop estimate.

    The 2023 California walnut production is forecast at 790,000 tons, up 5% from 2022’s production of 752,000 tons. The forecast is based on 385,000 bearing acres, down 4% from 2022’s estimated bearing acreage of 400,000.

    “The California walnut industry has increased its focus on providing handlers and growers the most accurate crop information by accelerating the collection of various data points,” said Robert Verloop, CEO and Executive Director for the California Walnut Commission (CWC) and Board (CWB).

    While official final shipment, inventory and close-out figures for the 2022 crop year will be released within the month, preliminary figures indicate last year’s crop is virtually sold out.

    “Last year, we were facing a completely different scenario with 130,000 tons in inventory brought on by the lingering effects of the COVID-impacted global marketplace and a record heat wave last September that negatively impacted the entire crop, which led to lethargic sales and record-low grower returns,” added Verloop.

    “With minimal carryover from the previous crop year and favorable weather throughout the growing season, we’re optimistic about the new crop year,” said Tim Sabado, CEO of Prima Noce, based in Linden, California. “The upcoming crop promises a return to the exceptional quality that defines California walnuts globally.

    “Harvest will begin in September, and may extend into November due to the early season cooler temperatures,” added Sabado. “Our focus is on an aggressive harvest, picking the crop at its peak quality and freshness.”

    Inshell walnut shipments for international destinations will start in October. In the U.S. and Canada, retail customers are currently placing orders and building sales plans for their traditionally large holiday promotions and their health-focused kernel campaigns for January and February.

    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.

    About the California Walnut Commission 

    The California Walnut Commission, established in 1987, is funded by mandatory assessments of the growers. The Commission is an agency of the State of California that works in concurrence with the Secretary of the California Department of Food and Agriculture (CDFA). The CWC is mainly involved in health research and export market development activities. For more industry information, health research and recipe ideas, visit www.walnuts.org.

  • Growers Optimistic about Pre-Season 2023 California Walnut Outlook

    What a difference a year makes! The California walnut industry is gearing up for a stellar 2023 harvest and shipping season after several years of drought, record low grower returns, COVID disrupted markets with supply chain challenges and a devastating heat wave in September 2022 that negatively impacted the entire crop. Here’s why this season is lining up to be a different story.

    Quality is expected to be excellent due to favorable growing conditions.

    Last winter’s prolonged heavy rains in the California walnut growing regions helped restore deep soil moisture and provided for healthy root zones, enabling trees to better tolerate late season high temperatures. The state also benefitted from an extensive snowpack which has provided all growing regions with sufficient water to support the trees and the crops through this season.

    The much-needed chilling hours were at normal levels, placing the trees into a much-needed deep winter dormancy and a prolonged “rest and recuperation” period. Mild spring temperatures were ideal and produced full, vibrant, vigorous tree canopies which supported strong pollination, resulting in robust nut sets throughout the orchards.

    “This year, our trees are more capable of handling higher temperatures than the previous years when the trees were under stress due to long-term deficit irrigation,” commented fourth-generation grower and handler Bill Carriere of Glenn, California. “Long-time growers have commented that the trees have not looked this strong and healthy in at least six to seven years. The full leaf canopy provided excellent temperature control and sun protection during the spring and summer months, allowing the walnuts to grow evenly with minimal sunburn. I am very optimistic that this year will mark a return to the premium quality walnuts we are known for in California.”

    Acreage adjustments

    Record low prices, brought on by an oversupply of darker than normal walnut kernels and weak demand in international markets, have taken a toll on growers, some opting to remove orchards from production. “Our family decided to pull out a productive orchard planted by my father in the early 2000s, it was a difficult decision, but the numbers told the story,” said Don Barton, a fourth-generation family farmer in Escalon, California. “We pulled a few acres with legacy varieties that are no longer desired by the broader buying community. Further south, walnut growers had removed trees due to new water restrictions that resulted in a lack of long-term availability to groundwater. Overall, the last few years have been devastating for growers and we are making some difficult decisions.”

    The extent of the acreage shift became more evident in an acreage survey conducted by the California Walnut Board between October 1, 2022, and June 30, 2023. For the first time ever, the acreage of California walnuts declined with 23,000 acres removed during the nine-month period. The industry will likely see additional reductions between July and December 2023, as more growers decide to shift to other crops and the needed tree removal equipment becomes available.

    Favorable New Crop Volumes and Inventory levels

    However, even with the removal of these orchards, the industry has a strong production base with approximately 380,000 producing acres and 37,000 younger non-bearing acres. USDA/National Agricultural Statistics Service Information (NASS) is currently conducting the annual walnut crop objective evaluation which counts and measures walnuts in a representative cross-industry sampling protocol. Incorporating the recently updated acreage report with the sampling results. USDA will release the official California walnut industry crop estimate on September 1, 2023.

    “This week, the California Walnut Board released the monthly and year-to-date shipment report which highlighted an additional reason why I am bullish about the upcoming season,” remarked Martin Mariani, a grower/processor from Winters, California, “The data shows that we have shipped the equivalent of 730,488 tons this season from an available inventory of 880,000 tons.” He went on to explain that when taking into consideration the high sales commitments going into the fall, “we are virtually sold out of available inventory, which bodes well for the industry. I can’t wait to bring the new crop to market.”

    Global and Domestic Market Outlook

    With a focus on inshell markets, Chile is anticipated to be sold out by the time the new California crop starts shipping this fall. With minimal inventories of export-quality walnuts on hand, coupled with the current limited supply of walnut halves in global markets, the fresh California crop of premium quality walnuts, inshell and kernels, will be in high demand.

    “Domestically, sales have increased 28% which helped our industry work through the high inventory numbers we saw at the start of the season” said Mike Poindexter of Poindexter Nut Company in Selma, California. “Major US retailers significantly increased their promotional efforts, which stimulated consumer sales.  This is continuing through the fall and will provide nice momentum going into the U.S. holiday season for new crop kernels and inshell sales.”

    Market Development and Sales Expansion

    Acknowledging the difficulty California walnut industry growers have faced in recent years, Robert Verloop, CEO and Executive Director for the California Walnut Commission (CWC) and Board, said the organization has taken several steps to aid growers.

    Robert Verloop, CEO and Executive Director, California Walnut Commission (CWC) and Board

    “There have been successful efforts during the season to respond to the heat wave impacted crop, yet with low prices and high input costs, the squeeze on family farms has been relentless. Through the Commission, we continue to work with our representatives in Washington, D.C. and Sacramento for emergency relief for growers,” he said.

    “Also, working with the CWC Board of Directors, industry handlers/processors, many volunteer leaders and elected officials and regulators, we have successfully secured a record USDA Section 32 purchase this season for up to $90 million; this funding is being used to help move the current crop out of our storage and into 1,400 food banks across the U.S., providing additional nutrition to thousands of families. In addition, the 20% reduction in tariffs recently announced by India will help us regain our footing in the Indian market.”

    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.

    About the California Walnut Commission 

    The California Walnut Commission, established in 1987, is funded by mandatory assessments of the growers. The Commission is an agency of the State of California that works in concurrence with the Secretary of the California Department of Food and Agriculture (CDFA). The CWC is mainly involved in health research and export market development activities. For more industry information, health research and recipe ideas, visit www.walnuts.org.

  • Walnut Production & Consumption in Ukraine Falling

    The USDA Foreign Agricultural Service (Post) forecasts Ukraine’s walnut production at 106,500 metric tons for marketing year (MY) 2023/24, similar to MY2022/23. Production fell in 2022 because some production areas are currently in occupied territory at the time of the report writing. Exports are slow, plagued by quality issues, constrained logistics because of armed conflict, and growing competition in international markets. Domestic consumption of walnuts is a mixed bag. The number of refugees that left the country is pushing it down while lowering consumption of imported tree nuts due to decreased disposable incomes by the population keeping it up. Ending stocks increased for each consecutive MY while domestic prices are sliding down.

    The State Statistics Service of Ukraine (SSSU) published official walnut production numbers for CY2022. The total walnut reported area is 17,100 ha, a 5.5 percent decrease compared to the previous CY. The main reason behind the area drop was the loss of control by the Ukrainian government over certain regions of Donetsk, Zaporozhe, Luhansk, Mykolaiv, Kharkiv, and Kherson regions, which were occupied as the result of the armed invasion by Russia, which started in late February 2022. Total walnut production is reported at 107,660 MT, a 6.7 percent decrease compared to the previous year. Post accepts these as MY2022/23 estimates.

    The MY2023/24 production number forecast is based on the following production area assumptions by Post:

    -A slight decrease in production area in the household sector as some trees are retiring out of production, and usually, households are reluctant to replace these with new ones.

    -There will be no increase in production areas by enterprises. Establishing new tree plantations is a long-term investment that seems especially risky during the active phase of armed conflict.

    The resulting MY2023/24 production area forecast is 16,900 hectares, a one-percent decrease compared to the previous MY.

    Below is a graph that depicts the Normalized Difference Vegetation Index (NDVI), a standardized measure of healthy vegetation. High NDVI values indicate healthier vegetation. Low NDVI values indicate low or no vegetation. Based on the year-to-year comparison of NDVI for Ukraine, presented below, FAS Kyiv would like to note that MY2023/24 growing conditions since June 2023 went below the long-term average (black line on the graph below) and started to resemble those observed in MY2022/23.

    The available information about subsurface soil moisture (see the relevant picture below) does not suggest improving growth conditions in the short term.

    Based on NDVI’s similarities with MY2022/23, Post forecasts MY2023/24 walnut production at 106,470 MT, similar to MY2022/23, with the potential to revise it downwards should the situation with soil moisture continue to deteriorate.

    Most walnuts harvested in Ukraine are produced by individuals or small private family farms, harvesting trees on their land or near their farms. This category of producers is not typically concerned with applying fertilizers and agrochemicals and uses manual labor for harvesting and shelling walnuts. Harvested walnuts are typically sold to intermediaries, who assemble batches designated for export.

    The production area farmed in such an extensive manner has decreased in the last several years. For CY2015, over 95 percent of the Ukrainian total walnut production area was on small, private, family farms. These farms represented 73 percent of the total Ukrainian walnut production area for CY2022. Post predicts this downward trend in walnut production on family farms will continue in the medium to long term as aging trees are losing their productivity and being chopped down. However, it should be noted that family farms still enjoy a dominant position in production volumes as they hold an absolute majority of the bearing tree area compared to industrial growers – 81 percent for CY2022.

    Since 2009, Ukrainian farmers have begun developing walnut orchards for commercial purposes. The average size of these commercial orchards ranges from 20 to 50 ha. Some regions, especially Central and Southern Ukraine, require irrigation to secure expected yields. At the same time, orchards in the northern part of Ukraine may experience lower yields because of the cooler climate. That is why around 30 percent of all commercial walnut gardens are located in the Vinnytsia region (Central Ukraine), according to SSSU data for CY2022.

    The growth in commercial production farms in pre-war years could be attributed to continued state financial support for orchard and berry producers (please refer to the Policy Section for more details) and the opening of the agricultural land market in Ukraine (see Policy Section). Industry reports note that farmers invested in developing high-yield commercial orchards of multiple walnut varieties, installing irrigation systems, and applying fertilizers. In southern Ukraine, seedlings could be planted in autumn, but in northern Ukraine, it is still advisable to plant in spring to avoid winter frost damage for newly planted trees. Walnuts are generally harvested from the end of September through the end of October.

    According to SSSU’s data, commercial growers did not plant new walnut orchards for CY2022, which indicates that professional growers are reluctant to get involved in long-term investments during the active phase of armed conflict with Russia. It should be noted that the initial investment required to establish an orchard range from $1,200 to $1,800 per ha. According to Post’s estimates (see PSD table at the end of the report), stocks are peaking because of export issues (see Exports Section). The wide availability of the product (including low-cost and low-quality generated by the households) is the main factor pushing down domestic walnut prices (see Walnut Export Prices Graph in Trade section). Subsequently, low prices are triggering a drop in profit margins of commercial growers, thus discouraging them from getting on board with the new investments.

    Tighter competition (both from domestic households and foreign competitors) forces existing commercial producers to become more efficient. According to a recent media report (in Ukrainian), one of the industrial growers, farming 91 hectares of trees, has purchased a tree shaker and harvester to speed up harvesting and be less dependent on the hired workforce. Specialization is one of the signs that Ukrainian walnut farmers have started perceiving it as their primary business.

    According to industry experts, the main body of existing industrial walnut orchards was planted 8-12 years ago with seedlings that would reach their full potential after ten years since they were planted. New walnut orchards can be expected to reach their full potential from four to five years after initial planting. FAS Kyiv notes that improvements in plant genetics may make walnut production more appealing for new companies considering entry into this business.

    Producers prefer Ukrainian-origin seedlings. However, due to increased demand and the inability of local seedling producers to meet the higher demand, some new seed varieties are imported from neighboring countries, like Moldova and Belarus, which feature similar growing conditions. Some growers are experimenting with imported seedling varieties to gain a competitive advantage in yield and quality. The Ukrainian State Registry of Plant Varieties (in Ukrainian) lists approximately 39 different walnut varieties in CY2023, allowing commercial growers to pick and choose commercially sustainable varieties in their area.

    Most of Ukraine’s household walnut producers do not treat trees for diseases. However, with more commercial walnut production coming online and taking over poorly managed and aging orchards, these newly established commercial producers reportedly pay greater attention to production technologies (beyond irrigation) to increase growing efficiencies. For example, these growers are researching ideal growing areas, investing in nurseries to improve genetic stock, and applying fertilizers and pesticides to their orchards.

    Sorting is predominantly done manually to ensure the quality and consistency of the product batches. Walnut production in Ukraine is still mainly a labor-intensive business, with most walnuts harvested by hand or rudimentary nut-picking devices in family farms used by the previous generation of growers. According to industry sources, family farms are known for their product’s unstable quality, pushing them into the low-level segment among foreign buyers.

    According to industry reports, commercial walnut production yields have increased, as well as the quality of their product. The majority of farmers did not initially consider installing shelling equipment at the stage when they were establishing their orchards. It happened because they relied on the opinions of suppliers of walnut seedlings, who were promising unrealistically high prices for in-shell walnuts to benefit their sales. Commercial growers ended up directly competing with family farms, which naturally had lower production costs and thus could sustain lower asking prices in the in-shell walnut market.

    Recognizing the price spread between shelled and in-shell walnuts (see Walnut Export Prices Graph in Trade section), the most advanced walnut producers started purchasing a wide range of equipment, allowing them to shell and pack their product to avoid competition at the crowded, low-end in-shell market. According to industry experts, the average conversion rate between shelled to in-shell walnuts in Ukraine ranges between 33-38 percent. This ratio is expected to improve in the future with the development of commercial production. Conversion rates for the recently established walnut orchards average around 55 percent. However, the share of these plantations is still relatively small, so the impact on the national average is minimal.

    The latest trend is that farmers started applying for long-term banking credits to establish vertically integrated production clusters, including an orchard, a processing facility with a packaging unit, and a certified quality control lab. For example, a walnut producer received a $15 million credit payable within seven years issued by the state-owned UkrExim Bank (in Ukrainian) in CY2021. Post is not aware of any similar investments for CY2022.

    Another part of the business for commercial growers is walnut wood, used for local furniture manufacture. Additionally, some wood is exported. Commercial walnut growers plant other trees during orchard development to harvest wood after a few years.

    Other products related to value-added walnut production are treated leaves for medicinal use and walnut (green/young nut) preserves. In recent years, Ukrainian consumers’ demand for walnut oil has increased, primarily from EU importers. There is also some domestic demand for walnut oil as a critical ingredient in the premium segment of natural cosmetic products.

    Continue reading the full report from USDA-FAS HERE.