In 2014 f.o.b. prices for San Joaquin Valley walnuts topped $2 a pound for higher-quality nuts. But even California walnut growers guilty of over production knew it wouldn’t last.
Walnut growers haven’t been told how much they’ll get for the nuts they sold last year, but some experts estimate that top prices may be no higher than 75 to 80 cents per pound. Those declining prices are the result of China increasing its production, while U.S. growers have become victims of their own success.
Walnuts have been one of the more stable and valuable agricultural commodities in the Central Valley — where about 90 percent of U.S. walnuts are grown. But over the past decade, farmers have planted more trees to expand their acreage, while others replaced other crops with walnuts in hopes of better returns.
Many trees reached maturity within the past couple of years, significantly increase walnut supplies. Additionally, China, normally a major buyer of U.S. walnuts, is expanding its own walnut industry and competing with U.S. growers. A strengthening U.S. dollar compared to the Euro, is also hurting prices.
While 2015 was a “bumper” year for walnut growers, what happens next season is uncertain, because of the heavier-than-average production per tree that generated a record 575,000 tons of nuts.
The industry was left with about 60,000 tons of unsold walnuts from last year — 20,000 tons more than average — which will have to be sold this year with the new nuts. A “bumper” harvest tends to be followed by less productive years, which should help reduce the glut of walnuts on the market and help elevate prices.