Walnut market update August 12, 2010

R.L. “Pete” Turner August 12, 2010

WALNUT MARKET/CROP REPORT

CROP:

On July 27th the California Walnut Handler Coalition set the “subjective” walnut crop estimate at 473,000 tons, up 8% from last years record crop of 436,000 tons. The official NASS “objective” crop estimated will be out on September 3rd.

The Handlers forecasted the Chandler’s at 186,000 tons, up 12% and Hartley’s at 60,000 tons, down 3%. Tulare’s are up 9% (55,000 tons) and Howards estimated at 53,000 tons, up 10%.

Because of the large crop (projected), many growers/packers feel undersize may be an issue. As an example, some Howard orchards appeared to have higher percentages of smaller walnuts from the second and third sets and it is questionable if they will reach size maturity by harvest.

The weather in the major growing regions continue to be favorable and most believe the quality of this years crop will be above average. In any event, it certainly should be much better than last year’s below quality crop.

Based on the fact that most of California’s other agriculture crops had a late harvest, we are projecting the walnut harvest to be 7-10 days later than normal. However, it usually catches up by the first week in October so should not have too much effect on the mid-varieties (Chandlers, Hartley’s, Tulare’s and Howards’s). However, logistically, it will put pressure on the harvest structure as most of the harvest will come off at the same time.

July shipments were 19,817 tons (inshell equivalent) 6,329 tons less that last July shipments. Total year to date shipments are 444,192 tons compared to 369,401 tons last year. If my August projections of 25,000 tons are correct, we will go into the new crop with a 26,000 ton carry-over. This will give the industry about the same total available tonnage we had last year.

California Walnut Shipments Recap (000)

Month (July) 2008/09 Year to Date 2009/10 Year to Date Percent

Inshell (lbs.) 1,366 172,906 692 205,073 18.6%

Shelled (lbs.) 23,171 257,482 16,978 297,923 15.7%

Total Tons
(Inshell eqv.) 26,146 369,401 19,817 444,192 20.2%



Market:

New crop Inshell business (Chandler) seems to be a little heavier than normal but expect it to taper off as we get closer to the official crop estimate.

The shelled market has firmed somewhat with Chandler Halves and Pieces trading at $3.85 and Regular Light Halves and Pieces at 3.65. Combinations Light Halves and Pieces seem to be firm at $3.40 with Medium and Small material at or slightly less than the Halves and Pieces market.

The walnut handlers will announce their opening prices on September 10th. and expect they will be higher than last years opening.

Please let me know if you have any questions or comments.

Kind regards,

Pete