R.L.”Pete“ Turner July, 20, 2007
CALIFORNIA WALNUT MARKET/CROP REPORT
The Walnut Marketing Board announced the June shipments at 20,863 inshell equivalent tons, 3,364 tons less than last year. Inshell shipments were 0.73 million pounds, 1.0 million pounds less than last June. Shelled shipments were 17.6 million pounds, 1.4 million pounds less than last year. Total inshell equivalent year to date shipments are 342,100 tons, 7,982 less than last year. However, the 2005 crop “shell out rate” (the inshell pounds required to produce shelled material) was adjusted down from 43.5% to 40.7%). I expect the 2006 crop “shell out rate” to be adjusted down from 42.9 to 40.5%.
All this means is that the 2006/07 shipments will show higher numbers once the adjustments takes place sometime in September.
Most leaders in the industry believe that the 2007 walnut crop will not reach last year’s crop tonnage (344,000 tons). This is based on an early bloom drop and lack of doubles and triples nutlets on Chandlers (45% of crop). In addition, the Visalia growers are reporting that the Serr’s tonnage (10% of crop) will be less than last year. However, there have been reports that the Hartley crop looks good and may come in the same or a little higher than last year.
Some walnut research experts believe the crop has been shorten by the lack of “chilling hours” and the extreme high temperatures last summer. Both may have affected the nut set. They believe the hot summer created excess catkins (male flowers) and when they are excessive, it takes energy away from the female bud (hey, I just report what I read).
In any event, the trees are lacking nut sets in almost all varieties especially Chandlers; however, Howard’s seem to be the only variety that may have a good crop.
In addition, some Lake County (northern) growers have lost their entire crop due to frost. As this is a light growing area; it will not have much effect on the overall crop tonnage.
As I reported earlier, the March 31, 2007 walnut inventories were well below estimates (lowest since 1998). In addition, I believe that the “shellout rate” will be below the 42.9 forecasted, which would put the 2006 crop year’s shipments well ahead of last year’s. I also believe the 2006 crop carry-over will be one of the lowest in recent history. Currently, my guess is 42,000 tons, 24,000 tons below last year’s very low carry-over.
I have adjusted my 2007 crop estimate from 370,000 tons to 350,000 tons, and most likely it will be below this level. It will be interesting to learn what the Packers/Growers forecast as the “subjective” estimate, which will be out last week of July.
The only thing I can report on the Inshell market is there is no market. The inventories have been depleted and with very little trading because of low inventories. The last Jumbo Hartley sales that I am aware of were $1.15.
The Shelled market remains firm and trading activity has also dropped due to availability. However, Light Halves and Pieces have been trading at $3.50 to $3.60 and 85% Light Haves at $3.80. Combination Halves and Pieces recently traded at $3.40. Baker material has been trading at the $2.70 levels. Medium and Small Piece material is $0.05 to $0.20 higher than the larger material (Halves and Pieces). Topping and Smaller material is higher with the final pricing depending on customer grade and requirements.
Because of the current inventory situation and the not so encouraging early reports on the 2007 crop, I believe the industry will face serious challenges meeting future demands. However, I believe we will continue to maintain market discipline regardless of the crop and inventory situation. To help keep our focus, all we have to do is look what has and is happening in the Almond industry.
Let me know if you have any questions or comments……!