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Walnut Market Update - September 2022

The 2021 crop year finished strong with record shipments in August of 36,546 tons, beating the previous record for August by 11%. The strong shipments in August could be an effect of the lag experienced in July, due to protests at the port. Exports, the biggest driver, were up 52%. For reference, exports were down 23% in July. Preliminary 2021 crop carryout stands at 136,673 tons, pending an expected minor adjustment by the USDA in the coming months. The carryout matches our forecast provided last month.

The 2021 crop year was one of the most difficult years the California Walnut industry has faced. While shipments started off very slow, they finished strong. Carryout expectations for this crop year were once as high as 160k tons, so to finish at 136k is a victory. With the challenging 2021 crop year finally behind us, we now turn our focus to new crop, and a lower supply forecast for the 2022 crop. The Walnut Objective Estimate was released by the USDA on September 1st and came in at 720,000 tons. This is 9.0% lower than the Unofficial Subjective Estimate of 791,000 tons released by California handlers in late July. It is also 1.3% lower than the 2021 crop of 729,770 tons.

With a lower supply forecast in California and prices currently lower than most of us have seen before, demand is starting to pick up. The Walnut Industry’s focus should remain to sell and ship as many Walnuts as possible to have a manageable 2022 crop carryout, as these large carryouts are not sustainable for such a perishable product. As the outlook for China’s 2022 crop remains positive, it is likely that pricing upside remains limited for the time being. However, it does appear that we have found a bottom and the bleeding has stopped.

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