Another Record Season for Walnuts

Walnut Yield Could Continue to Increase Over Next Few Years

By Brian German, Associate Broadcaster

October was the peak of harvest for the state’s biggest tree nut crops: almonds, pistachios and walnuts. California growers have completed this year’s walnut harvest, and so far growers are pleased with the yields. Final statistics for California walnut production in 2016 will not be available until mid- to late-January 2017.

The USDA National Agricultural Statistics Service (NASS)’s 2015 estimate of 365 thousand walnut acres in California (of which 300 thousand were bearing acres), represents a 50 percent increase versus a decade ago, according to Dennis Balint. Balint, who just retired as longtime executive director of the Folsom-based California Walnut Board and CEO of the California Walnut Commission since 1995, became the new special assistant to the California Walnut Board on November 1, 2016.

Dennis-Balint, California Walnuts
Dennis-Balint, California Walnuts

Growers had a record walnut harvest last year, and this year looks even more promising. “This year’s crop estimate from USDA’s California Agricultural Statistic Service (CASS) is 670 thousand tons, an 11 percent increase over last year’s 603,000 tons. 

The NASS office in Sacramento, as relayed by Balint, reported this year’s walnut season began with a significant amount of winter moisture, along with an ample amount of chilling hours and average weather conditions during walnut bloom.  Springtime rain concerned some growers because of the increased chances of blight and any resulting damage is under assessment.

While overall weather conditions were advantageous for growers, results were varied. “If you’re in Reading or Modesto, or Visalia, different factors affected you: climates, your own horticultural practices, what varieties you’re growing, etc.,” said Balint.

The estimate of this year’s harvest is good news for growers who, not many years ago, were fortunate to harvest merely 300,000 tons. Even with the estimated record harvest, there are still close to 80,000 acres of younger, nonbearing walnut trees in the state. Balint commented, “As those acres mature and come into production over the next few years—all things being equal—California’s walnut harvest could potentially increase by another 30 to 40 thousand tons per year.”

california-walnut-boardBalint also reported the Walnut Board has four tests in the grocery marketplace to determine how to increase stores’ holiday inventory of walnuts. [EDITOR’S NOTE: For fans of inshell walnuts, buy your supply early and often. Inventory of inshell walnuts is not expected to extend beyond the holidays.]

As of November 1, 2016, board members of the California Walnut Industry appointed Michelle Mcneil Connelly, former senior marketing director, as executive director of the California Walnut Board and as CEO of the California Walnut Commission.


Links:

The California Walnut Board was established in 1948 to represent the walnut growers and handlers of California. The Board is funded by mandatory assessments of the handlers. The California Walnut Commission, established in 1987, is funded by mandatory assessments of the growers.

USDA’s National Agricultural Statistics Service California Field Office is operated in cooperation with the California Department of Food and Agriculture.

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Walnut Assessment to Increase

California Walnut Board To Raise Assessment for Domestic Marketing

By Laurie Greene, Editor

 

Dennis Balint, executive director, California Walnut Board; president and CEO, California Walnut Commissionexplained to California Ag Today (CAT) the Board’s proposed increase in the marketable kernel pound weight assessment for the upcoming marketing year. The industry can  comment until Oct. 17, 2016 at the Federal Registry website using the following link:

Marketing Order No. 984, Walnuts Grown in California; Increased Assessment Rate”

Balint: This proposed rule would implement a recommendation from the California Walnut Board (Board) to increase the assessment rate established for the 2016-17 year and subsequent marketing years from $0.0379 to $0.0465 per kernel pound weight of assessable walnuts.

The Board, comprised of growers and handlers of walnuts operating within the area of production, locally administers the marketing order. Assessments upon walnut handlers are used by the Board to fund reasonable and necessary expenses of the program. The marketing year begins September 1 and ends August 31. The assessment rate would remain in effect indefinitely unless modified, suspended, or terminated.

California walnut orchard
California walnut orchard

The Board derived the recommended assessment rate by dividing anticipated assessment revenue needed by estimated shipments of California walnuts “certified as merchantable.” The 553,000-ton (inshell) estimate for merchantable shipments is an average of shipments during three prior years.

Pursuant to § 984.51(b) of the order, this figure is converted to a merchantable kernel weight basis using a factor of 0.45 (553,000 tons × 2,000 pounds per ton × 0.45), which yields 497,700,000 kernel weight pounds. At $0.0465 per pound, the new assessment rate should generate $23,143,050 in assessment income, which is equal to estimated expenses.

CAT: So the Walnut Board needs to raise the assessment to generate more dollars in order to maintain the aggressive domestic marketing program the Board did last year?

Balint: We raised the assessment rate to satisfy the programs the Board wanted us to execute. Last marketing year, we did the first substantial marketing campaign in the domestic market. This year, we are repeating the program. The advertising is nearly identical; however, we did have a few new executions for print. Some of the details on the PR side are different. But essentially, it’s the same plan and the same budget.

california-walnut-boardTo run that program last year, we were able to draw on reserve funds in addition to the assessment. This year, we did not want to draw on those reserve funds because we would have brought the reserve funds down to a point we were uncomfortable with. So, the assessment rate went up so we could run the same level of support without touching the reserve.

CAT: Like last year, will this year be a multi-million dollar campaign to really get walnuts on the radar screen for all U.S. consumers?

Balint: Yes. We know that about 22% of U.S. households buy walnuts. We’re trying to increase that amount. Actually, we’re trying to increase two things: the number of households that buy walnuts and the usage of walnuts by people who were previously designated as what we call “light users.” We’re trying to get a bigger slice of the pie.

In the long term, getting new users is critically important. The point we’re trying to make is, no one buys things basically just for price. If they’re already using walnuts, we hope they will buy more if the price is lower.

CAT: And for the people who are not buying walnuts?

Balint: Long term, getting people who are not using walnuts to start using them is the way for our industry to get stronger. Of the people who buy walnuts, about 87% buy them because they know walnuts are healthy. That’s their primary motivation.

CAT: You have spun out beautiful ads about how walnuts can enhance salads and enhance meals.

Balint: The print campaign this season is just a slightly different execution of last season’s campaign, but it is the same strategy.

CAT: And television can be very expensive?

Balint: It is, and it forces us to make choices; whereas, in print we have an array of print ads that cover an array of uses: salads, vegetable side dishes, entrees, appetizers, snacking out-of-hand. The theory is, if you have two or three pounds of walnuts in your pantry and you use them for a salad, you will wind up snacking on them.

CAT: How about digital ads on websites such as the Food Network?

Balint: When you look at the cost of digital, it is cheaper than television, for sure.

CAT: Do you know the value of different mediums?

Balint: In my opinion, what we really do not know is the value of an impression in digital versus the value of an impression in print magazines versus the value of an impression in television. No one has ever quantified that.

CAT: Really?

Balint: Frankly, I don’t think anybody wants to quantify it. It would be very difficult to get everyone to agree.

CAT: But digital seems to be getting more eyes than television.

Balint: The digital people certainly know that they are getting a bigger and bigger slice of the pie.

CAT: Is the consumption of walnuts in the U.S. still flat?

Balint: It has been. We have not seen the latest figures, but [consumption] has been flat probably for 10 years. If you look at the nut category this past year, the usage of nuts was generally down, but we saw a slight increase in walnuts.

We are pleased about that. We know nuts are healthy in general. Walnuts are more of an ingredient nut than our friends in the almond industry and the pistachio industry. They’re more of a snacking nut. We’re more of an ingredient nut.

CAT: Back to the Board’s proposed assessment increase; is it on the Federal Register and people can go there and make comments?

Balint: Yes, that’s correct, and the marketing order gives the Walnut Board the right to do these things. And, similar to the Almond Board’s recent proposed assessment increase, it doesn’t have to go to a referendum.

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Record Walnut Crop

New Record Walnut Crop:  575,000 Tons

By Patrick Cavanaugh, Deputy Editor

 

In a recent interview with Dennis Balint, executive director and ceo of the California Walnut Board, Balint discussed the Board’s promotion efforts on what has become another record walnut crop, grown on approximately 300,000 acres in the state.

California Ag Today (CAT): Despite the drought, the valiant walnut growers of California have produced yet another record crop of 575,000 tons, up one percent from 2014’s crop, and crop quality is reported to be excellent. How does that relate to overall supply?

Balint: This increase represents 5,000 additional bearing acres. Last year, the world availability was up about 140,000 tons higher than the previous year. We knew that we could absorb incremental production of 20,000 or 30,000 tons a year; however, 140,000 tons was a bit of a surprise. Couple that with the fact that China’s economy isn’t today what it was a couple of years ago. That has hurt us a bit.Walnut trees

So at any rate, that means we are going to have a record total of availability this year, and I think we are going to see prices moderate. Now, the really good news is the industry had some foresight in approving a huge budget to market the product, so we’ll be having a serious marketing campaign in the 2015-2016-crop year.

CAT: Walnut consuming promotions?

Balint: The board will continue promoting walnuts with print and television campaigns, as well as public relations efforts through Edelman Public Relations. That will continue on two fronts; one is consumer appeal, like recipes, and just raising overall awareness regarding the versatility of walnuts; but second and most importantly, Edelman is in charged with promoting health. Health continues to be a very important card in promoting our product to consumers and health professionals as well.

CAT: It is always good that people think of health when they think of walnuts!

Balint: Yeah they do. It is amazing how that number has changed over the years.

CAT: Is eating more, better?

Balint: You know we have a daily range. When we do studies, researchers will always look at the composition of the product and, depending on what they are expecting, they will adjust accordingly. So we have studies that are based on 1 ounce, 1.5 ounces, and 2 ounces daily. So it really depends on the end points they choose to look at.

We try to never talk about compounds because we like to talk about the whole walnut, but occasionally researchers who are deconstructionists suspect a particular compound. Then we have to analyze it down to the nitty-gritty so somebody can put it in a pill. When that happens on occasion, researchers say, “Well, we really need to feed 2 ounces.” And in some cases, 2 ounces in the short-term works very well. In the long-term, being practical, 1 to 1.5 ounces is good.

CAT: Please go back to the advertising budget. Is it mainly domestic?

Balint: It is all domestic. The export program will remain intact—no changes there. We will still have good programs in a number of countries overseas, but all of the increased production is going into the domestic market.

CAT: Do we need to increase per capita consumption to handle the oversupply issue?

Balint: That is a good question. What we need is the following: We estimate, and we don’t have hard numbers, not much more than one in five households is purchasing and using walnuts on a regular basis. So that leaves a lot of room for growth. Our campaign has been designed to appeal to light and non-users, and not just the core consumer who is already loving walnuts and buying them on a regular basis, to expand our user base.  We are doing so by presenting walnuts as an ingredient in salads, vegetable side dishes, entrees, and of course as a snack. As a matter-of-fact, we are waiting on copy testing results in the next week or two.

CAT: Good. And walnuts make everything better and that’s what it is all about, isn’t it?

Balint: Absolutely. Walnuts are a little added touch that makes food not only more interesting because of the color, texture, and taste, but also because it is healthful. All of our ads are going to have the heart check logo. I want to reemphasize health research will still capture a lot of media on its own. That will continue, ‘no reduction there.

CAT: Are the ads in food or fitness magazines primarily?

Balint: Food magazines, primarily. We have four executions of print ads and two television commercials. We are waiting for the test results for the ads. The copy testing we have done also includes what the experts call rapid eye movement. By observing people’s eyes, we’ll know when consumers like or don’t like a word or a phrase, or think something is plausible or implausible. We will also know where their glance goes, how long it stays there and where it goes next.

This will help us structure the commercial to eliminate some of those “down spots” and focus on things that capture their attention. We will be reaching 95% of adults between the ages of 25 and 54 with this campaign on average 26 times per person over a period of about five months.

CAT: Wow, you are running it on some big television programs?

We’ll be going after different segments. For example, we have scheduled morning television segments like “Live with Kelly & Michael,” “Rachael” with Rachael Rae, and pillar events. A pillar event might be a broadcast on E! Network such as “From the Red Carpet at the Academy Awards” or an event in the sporting world. But that is not a focus. We will also include standard shows like “The Big Bang Theory” and so on.

Television will be in ten key markets, and I don’t have the list in front of me. But we will also continue our aggressive social media program. We have a couple of new ideas that I think will capture people’s interest.California Walnut Commission logo

CAT: Tell us about the campaign with the wrapped truck that looks like a walnut.

Balint: We converted a food truck to look like a walnut by wrapping it with walnut texture and contoured the boxy truck into a rounded walnut shape. So when it is parked in downtown Manhattan or Washington D.C., the truck with those affixed contours makes quite a spectacle.

CAT: So what were you doing with that truck? Did you hand out information?

Balint: We made information available, facilitated games, hosted walnut cracking, and most importantly, served an ice cream sandwich made out of yogurt, walnuts and chocolate graham crackers. We had samples of walnuts as well.

CAT: What is your health research strategy? Are you working with key researchers to compare eating walnuts with not eating any nuts?

Balint: Our health research strategy depends on the target. Remember, walnuts are the only good food source of Omega-3; most nuts have no Omega-3. We like to test the whole walnut in a lot of our studies. Sometimes we will find an indication that one compound is more important than another; but we recently finished a study with 27 scientists for our annual meeting. They look at what we have done, what we are doing, and what we should do next. So it is not just guesswork, it is a carefully thought-out program that focuses on areas of greatest interest to scientists.

One thing I will tell you is one day before the meeting began, we had six key scientists come in for what we call a “brainstorming session.” We asked them to tell us how to make our program better: the way we run our health research program, the way we run the conference and so on. The unanimous opinion of the six in attendance was not to change a thing. They said basically the program is a model for what should happen in health research, because we don’t go into research with a preconceived notion. We don’t go in and say, “Researcher, please raise your hand and provide us with a positive result on this disease.” We follow the science.

CAT: What are your biggest markets abroad?

Balint: China of course is huge. But other very strong markets include Germany, Japan, Korea, Spain and Turkey. China slipped this past year, of course, and we are all scratching our heads because we hear a lot about China. But their economy is a little soft. They had a crackdown on the gray market, which hurt business a little bit because some of the product that goes into China finds its way there through either Hong Kong or Vietnam. So China’s utilization this year was down. It is too early to tell whether they will return or continue at the same pace they experienced in 2014-15. We just don’t know yet.

CAT: Are you promoting the health message in these foreign countries?

Balint: Yes, and it is a really interesting situation. In countries that have a tradition of walnut-use like China, only about 40% of our messaging is health-related because they have known it is healthy for a thousand years. Whereas, in Japan, when a big story breaks accompanied by some television coverage, our sales will spike like you can’t even believe. So, it differs by market.

Here in the U.S., it is very high, as in Germany and Spain. Turkey is building and India as well, but slowly. We have some issues there; India is a market in which they too grow lots of walnuts, but we are slowly but surely making some headway.

The Korean market opened in 1994, but it was 2001 before we had any meaningful number of shipments. You have to be patient with some of these markets to be able to dismantle some of the trade barriers.

CAT: Are there any markets in South America?

Balint: Years ago, in the 90’s, there was an effort in Brazil and Argentina. Now, Chile grows walnuts, Argentina grows some, Brazil still grows a few. The Mercosur* pact down there (a special trading pack between South American countries) is a problem because the Mercosur countries trade duty-free. So we are at a disadvantage. We’re contra-seasonal. Last, but not least, we have a tariff burden. So we tried it for a couple of years, but decided there were better places to invest.

CAT: Well, it’s interesting. We don’t see South America being a big market for almonds or pistachios yet either.

Balint: It’s true; they grow Brazil nuts and, as I said, walnuts. Chile, as a matter-of-fact, is increasing their plantings. As their plantings increase, their initial sales will remain within the South American continent. When they get into the summer, especially late summer, they will sell what they have left into markets like Korea, and if they can, France and Germany. They basically go into our markets and try to sell in advance of our crop.

CAT: How are California growers doing? They are going through another year of drought, and I’m sure you are worried….

Balint: Everyone is, and we are all waiting for the other shoe to drop. Here we are with another record crop, and we know the reason for that. It’s because five or six years ago, somebody planted more walnuts, and they are coming online now. It appears as though we are trying to grow more walnuts in the middle of the drought, though the fact of the matter is those trees went in the ground long before water scarcity became as bad as it currently is.

CAT: Exactly, Fresno County just released their numbers last month and broke a record 7 billion dollars. Kern County and Tulare County broke records as well. In terms of ag value, we are not taking such a hit, mainly due to high nut prices.

Balint: Even before I was in the commodity business, I used to work for a company in Massachusetts called William Underwood Company. They had B&M (Burnham & Morrill Company) Baked Beans, Underwood Deviled Ham and other meat spreads. That is where I learned about commodities.

We had an economist on staff to predict the prices of navy beans, fatback**, sugar, ham hocks, and chicken. I learned it was much easier for the chicken guy year to year; he would just have more chickens to count! The bean people could have more beans. What about the walnut people? If the trees weren’t in the ground, they were not going to get more walnuts.

________________________________

*Mercosur or Mercosul (Spanish: Mercado Común del Sur, Portuguese: Mercado Comum do Sul, Guarani: Ñemby Ñemuha, Southern Common Market) is a sub-regional bloc. Its full members are Argentina, Bolivia, Brazil, Paraguay, Uruguay and Venezuela. Its associate countries are Chile, Peru, Colombia and Ecuador.

Source: Wikipedia, the free encyclopedia

 

**Fatbackthe fat, usually salted, from the upper part of a side of pork

Source:  Dictionary.com

 

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Nut Yields May Be Reduced by Drought

Source: Christine Souza; Ag Alert

Enduring a drought that has lasted several years, growers of California’s primary nut crops—almonds, walnuts and pistachios—are finishing this year’s harvest and planning for what Mother Nature may or may not bring in the coming year.

“Location, location, location” proved critical to almond and pistachio crops in particular, and seemed to be the determining factor in whether trees had enough water and the required number of chilling hours.

Some farmers were luckier than others, including Larry Lowder of Madera. A grower of almonds and pistachios, Lowder said he was “very fortunate where we live and this year we were able to produce a crop, where others didn’t have that luxury.” He said his farm is located in a microclimate that received sufficient chilling hours during the winter, something that was lacking in other parts of the Central Valley.

Dealing with a surface water allocation of zero, Lowder said he had to rely on deep wells, and he saved as much water as possible by using drip irrigation, microsprinklers and upgraded wells.

Even with a relatively favorable situation, Lowder said his almond yields were down by about 10 percent, although pistachio yields were much better.

In some California pistachio and almond orchards, the drought resulted in a shorter crop and a higher incidence of “blanks,” when a shell lacks a viable nut or kernel.

“Some growers, who had the effect of poor pollinization as well as lack of water, their crops were significantly off and there will be crop insurance claims filed,” said Richard Matoian, executive director of Fresno-based American Pistachio Growers. “One grower said the orchard looked like it had 3,500 pounds per acre, but ended up with 800 pounds of nuts to the acre.”

The U.S. Department of Agriculture estimated this year’s California pistachio crop at between 485 million and 500 million pounds, Matoian said, which is smaller than expected because it was to be an “on year” for pistachios. New figures from the Administrative Committee for Pistachios have increased the estimate to 515 million pounds, which Matoian said was “larger than expected in midsummer but certainly lower than original expectations.”

Many pistachio growers purchased emergency supplies of water, Matoian said, paying as much as $3,000 per acre-foot. Reports from the almond sector showed some growers paid between $1,200 and $2,200 per acre-foot.

Reflecting on how almond growers negotiated the drought, Mel Machado, assistant director of member relations for Blue Diamond Growers, said some orchards were either removed or abandoned, and water was moved from older blocks of trees to younger blocks.

“Growers have learned a lot about how to manage the water they have, but even with good technology and good application, there are orchards that definitely had increased stress this year,” Machado said. “You can see it in the lack of growth of the trees.”

Farmer Stan Wilson of Shafter grows almonds and other crops, and said he made it through this season on well water, but had to reactivate old wells, add extensions to pumps and install an underground pipeline so that he could move water from one field to another.

“We made it through the year. We had no surface water at all, so the only water supply we had was from wells. It is the first year we had zero deliveries,” said Wilson, who fallowed about 160 acres of row crops as a result of the drought.

With harvest drawing to a close, Machado reported that this year’s almond crop is hovering at around 1.85 billion pounds, down from the earlier government estimate of 2.1 billion pounds. Machado said he has seen higher levels of rejects in the almonds produced, but there were problems in addition to drought that played a part, such as varying degrees of stress and salinity issues.

“Quite frankly, we needed the 2.1 billion pounds. A lot of people look at orchards planted over the past few years and say, ‘What are you going to do with those when they come into production?’ Well, we’re going to market them. There is demand out there for the product. We’re still in a demand-exceeds-supply situation,” Machado said.

With just a few more weeks left of harvest, California walnut growers expect a crop that is 545,000 tons, which would be a record, said Dennis Balint, CEO of the California Walnut Commission. No official production figure will be known until harvest is complete, but Balint attributed the expected increase to newly planted orchards and young orchards that are coming into production with higher yields.

He, too, reported continued strong demand.

“Traditionally, we’ve been the ingredient nut, but demand for walnuts is strong and health benefits are starting to drive demand for walnuts. We are seeing more snacking, which we are pleased with,” Balint said.

Marketers said the increasing demand for California nut crops in domestic and global markets is good news for growers. There are 200,000 bearing acres of pistachios in California, and 100,000 acres are non-bearing, Matoian said. For almonds, USDA reported there are 860,000 bearing acres, with 80,000 non-bearing acres. There are an estimated 280,000 bearing acres of walnuts in California, and 45,000 acres that are non-bearing.

For the almond business, Machado said, “the limitation on the crop is going to be water. Water is going to be the competing factor for the almond crop, just as it is for just about every other crop in the Central Valley.”

As winter approaches, nut growers said they are hopeful that the state’s water situation changes for the better, although, Matoian said, “Even if we have a good rain year, we are going to have a lack of water available to growers; that is inevitable. That is what we’re being told by water regulators.”

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California Ag Today: California Walnut Growers Support its Board

CALIFORNIA WALNUT GROWERS OVERWHELMINGLY SUPPORT CONTINUTATION OF MARKETING ORDER

Ninety-five percent of eligible California walnut growers who voted and ninety-three percent of the volume represented in the referendum favored continuing the Federal Marketing Order and the efforts of the California Walnut Board.  This is the first continuation referendum vote ever held by the industry.

“It’s rewarding to know that the work of the California Walnut Board is recognized by the growers and handlers we strive to serve,” said Dr. Jerome Siebert, Chairman of the California Walnut Board.  “When we come together as an industry, we are powerful at addressing challenges and generating far-reaching results for all California walnut producers.”

Voting in the referendum took place from April 1 through April 19, 2014 and those eligible to vote were growers engaged in the production of walnuts within the state during the period September 1, 2012 through August 31, 2013.  In order for the referendum to pass, at least two-thirds of eligible producers must vote in favor of continuance.  Since the order was amended in 2008, a vote is now required every six years.

“We’re grateful for the continued support of our growers, who see the value of working together to benefit the entire industry,” said Dennis A. Balint, Executive Director of the California Walnut Board. “There is more work ahead, but we’re starting from a good place and will continue to build on several decades of experience, relationships, research and success.”

The California walnut industry is made up of more than 4,000 growers and 100 handlers. The growers and handlers are represented by two entities, the California Walnut Board and the California Walnut Commission.

 

California Ag Today

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