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Walnut Market Update - August 2022

July shipments were lower than expected at 29,969 tons. While shipments were 15% lower than last July, they were slightly better than the previous five-year average for July shipments of 28,680 tons. Exports were the big driver, down 22% versus last July. Due to the underperforming July shipments, our carryout projection has been revised upwards to roughly 135k tons.

Reported new sales in July were 19k tons and total supply is estimated to be 92% sold, with only 64,195 tons remaining unsold. With the fresh crop on the horizon, we anticipate that this remaining volume will be moved out soon at the current low-price levels.

While July shipments were disappointing, the California Walnut industry has still been able to significantly improve the position heading into the 2022 crop. The 2021 crop carryout was once thought to be more than 160k tons and achieving the current expected carryout between 130k-140k tons seemed entirely out of reach. The momentum gained over the last six months is promising and needs to be carried into the 2022 crop.

For the upcoming California 2022 crop, an unofficial Subjective Estimate of 791,000 tons was released by the California industry a few weeks ago. This indicates a 60,000 ton or 8% increase over this year’s 2021 crop of 730,000 tons. Outlook for China’s 2022 crop also continues to remain positive as growing conditions have been favorable.

With harvest upon us in the coming weeks, it remains clear that global supply will increase significantly in the coming crop year. With this at the forefront of our minds, it is important that the global walnut industry continues to focus on driving new product innovations and growing additional market segments with low penetration, such as ingredients. Given the low-price environment we are likely to be in for the near term, we encourage all our customers to include walnuts in their research and development, and new product development plans and conversations, as they will be able to rely on consistent supply and favorable pricing for the foreseeable future.

Wishing each of our growing partners and the entire California industry a safe and productive 2022 crop harvest!

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