Nut Growers Say They’re Feeling Pricing Pinch

Nut Growers Say They’re Feeling Pricing Pinch

 

Nut growers are concerned where nut prices are going. In fact, 54% of respondents to our 2018 State of the Industry Survey say they’re noticing a change. Overplanting is definitely a concern for growers who see its impact on prices as directly related.

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“Many new orchards being developed by outside investors. Strength of the dollar as well as foreign competition,” complains a walnut grower who has been in operation for more than 25 years about pricing challenges.

An almond grower says variety choice can also affect pricing, saying “oversupply of inferior varieties namely ‘Independence’ will bring down the value of all others.”

An almond and pistachio grower worries “Prices have (been) cut in half and production continues to increase.”

An almond grower says “we need to keep supply and demand equal for competitive returns so our industry continues to be viable.”

“If we produce a large crop nut prices will drop to the degree where it may not be profitable to grow,” says an almond and walnut grower. Echoing that is another almond grower says: “Almond acreage is over one million acres that have to find a market.”

A pistachio and almond grower says the downward trend in prices are complicated by the fact that “new regulations are continuing to make production more expensive.”

“Exchange rates have negatively impacted prices, U.S. trade policy may damage it further,” worries an almond grower.

Nut growers say a hot summer and fall was tough on for their crops, and nearly 27% said their production was down by 10% and 17% indicated their production was flat. Growers do say there is a bright side to this dip in production.

“We have a short crop this year as a result of the heat. Prices are up as a result,” optimistically says an almond and walnut grower.

It’s not all doom and gloom, though. Growers do see bright spots in both demand and pricing. In fact, a walnut grower says prices are directly related to demand and “If demand is increased, prices should be OK.” This is echoed by a walnut grower, who says “I think the market will grow to meet increasing production. Prices will remain stable.”

An almond and walnut grower says “I think prices will strengthen to a realistic sustainable level. With all the growth in acres marketers are having to get comfortable with the new norm.”

Nearly 18% of growers who took our 2018 State of the Industry survey indicated they grow alternative nuts. Minor nut crops such as pecans, chestnuts, hazelnuts, and macadamia nuts were all well-represented.

 

David Doll

Q: What are your hopes and predictions for 2018?

 

A: We’ll see record nut crops in 2018 across California. The combination of increased acreage and higher than average yields will lead to record-setting crops for almonds, pistachios, and walnuts. Late spring rains will attempt to damper the crops, but will only provide cooler conditions, which increase kernel size and quality. Insect pressure will be down from last year due to implementation of sanitation practices. Yields and the lowering value of the dollar lead to increased nut exports and prices, leading to record revenues for many operations across the state. The only drawback is that a weaker dollar usually means a downturned economy. –

David Doll, Advisory Board member, Pomology Advisor, University of California Cooperative Extension in Merced, CA .

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