Friday, January 10, 2014

Walnut Shipment : December 2013

Good Afternoon All

Please find the update from Walnut Board's shipment report below.

As of December, 31, 2013, the packers reported walnut receipts of 487,963 tons, which should reflect close to the final 2013 crop tonnage.

Although the Central Valley has experience extra cold temperatures for the month of December, growers feel they may lose some new growth, but overall, it should not have much of an effect on the trees.

However, the major concern right now is that California is experiencing a record breaking drought. It has been reported that 2013 was the driest calendar year on record for the San Joaquin Valley.  Many of the experts fear that there is little possibility of relief in sight as the long term climate predictions do not suggest a likelihood for an average or above average rainfall over the next several months.  Right now, the Valley is only 20 percent of 8.4 inch rainfall average for this time of year.

I have discussed this with several of the major growers in this area and all are saying that water could be a major factor for the 2014 walnut crop.  Many growers were irrigation in Mid-December, which is rare for this time of year.  Many of the growers believe they will be looking forward to higher cost for water as well as some shortages in certain areas.

December inshell shipments were 36.7 million pounds, up 3.3 million pounds from last year.

Shelled shipments were 29.6 million pounds, up 2.6 million pounds from last year. Total December shipments were 51,779 tons (inshell equivalent) compared to 47,849 tons last year

The total year to date shipments (inshell equivalent) is 259,784 tons, compared to 252,684 tons at this time last year.

Based on the fact that the crop is down, shipments are up; I believe the industry should not have any problem moving this year’s crop at the current market levels.

California Walnut Shipments Recap (000)

Month (Dec)         2012/13      Year to Date      2013/14     Year to Date     Percent

In-shell (lbs.)             33,357            227,441              36,740      241,464             6.2 %

Shelled (lbs.)             27,680            123,400              29,601      123,200            -0.2%

Total Tons               47,849             252,684             51,779       259,784             2.3%

The market has not moved much over the holidays and will most likely stay firm at least for the next month or so.

Demand from Europe for shelled products and Turkey for inshell is still active as well as domestic customers looking to secure contracts for their annual requirements.

The forward market has yet to be determined and the market will adjust to whatever China does after their New Year. My guess is they will be back as current shipments are down for this region and there will most likely be less carry-over inventory they had at this time last year. In any case, don't believe the market will move much one way or the other.

R.L. "Pete" Turner

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