Are walnut prices going up?

Analysts at Rabo AgriFinance have published a five-year outlook for walnuts, and the market seems to be flattening out after record growth. However, there are promising signs for long-term market opportunities, despite a tumultuous year for port congestion, supply chain contraction and a drought that could deepen. And further expansion is expected, according to Jonathan Field, general manager of the Walnut Bargaining Association. Expectations of lower production and availability led to stronger prices at the start of this marketing season, but the past few months have led to downward pressure on prices, Magaña said.

The key to next season is to open reasonably with prices that are sustainable if they don't rise slightly throughout the season. Pete Jelavich has been growing walnuts for more than 20 years and says this year's harvest is one of the most important. Like many California products, walnuts continue to be prized for their high quality and attention to food safety, which serves as “a differentiator in export markets. You go to a Super Bowl party and you'll find a bowl of flavored pistachios or almonds, but it's not often you see a bowl of flavored walnuts, although that's starting to change little by little.

While shipments for March were technically down 1% compared to last year, the California nut industry continues to take big steps in the right direction. We expect sellers to make the decision to sell walnuts rather than store them in cold rooms, so some combined and domestic LHP offers will emerge. Increased competition for walnuts could drive new collaborations with some Chilean exporters, allowing the industry to grow and expand into new markets, benefiting food manufacturers and retailers with a more reliable supply. A positive aspect of the growing competition is that having more good quality nuts could increase demand.

Censky says soy leaders may have real concerns about any shift in agricultural programs toward margin coverage rather than income or benchmark prices. A very large request for a nut from the USDA is anticipated to be several million pounds. Planted area has grown only marginally in recent years and current prices are unlikely to incentivize more plantations or extract a large number of acres of production. That follows the trend of last year's harvest, as strong demand continued to drive prices higher during the marketing season.

Given these global scenarios in the other three main origins, the California nut industry has an opportunity to turn what was once a daunting task into a somewhat manageable position.

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