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  • California nut prices softening

    Jan 26th, 2016

    Increased competition, decrease export demand

    An weakening in export demand and an increase in competition has caused prices for California almonds, pistachios and walnuts to decline. Yet, San Joaquin Valley growers are not overly concerned, saying a correction in the market was expected.“We had a good run for five or six years,” says Chuck Nichols, a Hanford grower of almonds and pistachios. “But things have changed.”What’s changed is a combination of factors, including a general weakening in the economy of some of California’s biggest export markets. All three of California’s major nut crops (almonds, pistachios and walnuts) depend heavily on the export markets – especially China, which has been buying fewer nuts.Almond growers and sellers say escalating prices for almonds and the strong U.S. dollar also contributed to the current sluggishness in the market.

    As sales slowed, prices to farmers also have begun to tumble. Jim Zion, managing partner of Meridian Growers in Clovis, estimates prices to farmers dropped about 20 percent to $2.50 to $2.75 a pound. The upside, Zion says, is that as prices drop, ingredient buyers are coming back into the market and buying more almonds for products like trail mix and other snacks.Zion says that while growers may get antsy over lower prices, he does not anticipate a major price drop, even as the industry tries to sell a 1.8 billion-pound crop of almonds and new trees continue to be planted.Two years ago, almonds replaced grapes as Fresno County’s No. 1 crop with a value of $1.3 billion.

    Different challenge for walnuts

    Walnut growers have faced a different set of challenges. Unlike other nut crops, California’s walnut industry competes heavily against other foreign producers, including China, Chile, Turkey and Ukraine.Dennis Balint, chief executive officer of the California Walnut Commission, says the world supply of walnuts swelled last year by 140,000 tons to more than 1 million, creating a glut.“We can handle increases of 20,000 to 25,000 tons and still maintain our markets,” Balint says. “But 140,000 tons is hard to take, the market began to weaken and that continues this year.”Prices to the growers tanked, falling by as much as 60 percent over the last nine months.But, like almonds, the lower-cost walnut also has become more attractive to domestic buyers, including food manufacturers.

    Pistachio market steady

    Pistachio growers are perhaps the least worried. Despite weak demand, prices have not declined substantially.“The market is very quiet right now,” Nichols says. “And prices have only dropped about 10 cents from the top.”Nichols, a longtime grower, doubts that the price drop signals the beginning of a major collapse in the nut industry. He says the biggest limiting factor continues to be the availability of land with access to water.


    Source: kansascity.com