News

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Introduction

Dear Grower,

 

In our business - our business being our growers, hullers and processors - there are three words that frequent our vocabulary:

QUALITY, defined as “the standard of something as measured against other things of a similar kind.”

RESULT, defined as “a consequence, effect, or outcome of something.”

GRADE, defined as “a particular level of rank, quality, or value.”

The mindset of these three items should be evident in orchard management with growers implementing management practices like pruning, spraying, sanitation and irrigation. These words factor in for hullers and processors as they keep themselves busy with updating and maintaining machinery and software all while staying on top of sanitation and food safety standards to keep everything compliant and safe for the end consumer. 

It seems like every time we walk our plant these days and talk to our team, they are preparing for some type of audit. Here at Turlock Walnut Company, we are constantly striving to do our best work to ensure sure we are prepared to give the best care for your walnuts. By providing a top-notch, innovative, and pristine facility, we’re working to assure a qualitative end result for our growers.

As for grading, that largely falls on how the walnuts are managed prior to arriving at our facility. From the orchard to the huller, factors such as transportation, handling, and moisture content are vital to the grade issued. As the processor that receives growers grading information, Turlock Walnut can only base payments on those results.

As growers, hullers and processors, working together to achieve the best crop and a favorable grade is a win for everyone. Cheers to another quality year from our growers! Let’s all do our part moving forward into the new crop year to ensure the end result is the one we desire.

 

Kevin Kajioka

General Manager

 

Marcus Lema

Grower Relations Manager    

 

Tony Romo
Operations Manager

 

 

Walnut Shipments by Region September 1st 2019 – January 31st, 2020:

Shelled:

• North America is up 500,521 pounds or +0.5%

• Europe is up 10 million pounds or +21.7% 

• Middle East is down 9.7 million pounds or -47%

• Asia is down 3.36 million pounds or -8.9%

 

In-shell:

• North America is down 5.15 million pounds or -32.3%

• Europe is up 4.87 million pounds or +6.6%

• Middle East is down 26.67 million pounds or -17.9%

• Asia is down 8.21 million pounds or -25.8%

January 2020 Walnut Shipment Report Update

 

• January 2020 shipments were 59,755 in-shell equivalent tons. For January 2020, shipments decreased by 15,944 tons (-21%) compared to January 2019.

• September 1st, 2019 to January 31, 2020, in-shell equivalent tons shipped are 347,645. A decrease of 20,038 tons (-5.5%) compared to the same period in the 2018-2019 Marketing Year.

• In-shell shipments for January 2020 were 20,640,000 pounds, a decrease of 26,659,000 pounds (-56.4%) compared to January 2019.

• Season to date in-shell shipments (September 1st, 2019 – January 31, 2020) are 238,533,000 million pounds, a decrease of 35,489,000 million pounds (-13%) compared to the same period in the 2018-2019 Marketing Year.

• Shelled shipments for January 2020 were 43,503,000 million pounds, a decrease of 2,509,000 million pounds (-5.5%) compared to January 2019.

• Season to date shelled shipments (September 1st, 2019 – January 31, 2020) are 200,973,000 million pounds, a decrease of 2,941,000 million pounds (-1.4%) compared to the same period in the 2018 Marketing Year.

Countries with big increases/decreases in imports September 1st, 2019 – January 31, 2020:

Shelled

• USA shelled up 890,133 pounds or +0.98%

• Canada shelled down 373,437 pounds or -4.98%

• Germany shelled up 12,950,570 pounds or +72.4%

• Spain shelled down 1,058,327 pounds or -7.9%

• UAE shelled down 2,583,846 pounds or -49.3%

• Israel shelled down 3,555,993 pounds or -46.9%

• Japan shelled up 681,723 pounds or +5.4%

• Korea shelled down 3,197,814 pounds or -23.9%

In-Shell

• Italy in-shell up 2,318,448 pounds or +5.1%

• Spain in-shell up 1,515,287 pounds or +9.85%

• Lebanon in-shell down 5,233,180 pounds or -80.7%

• Morocco in-shell down 3,037,239 pounds or -46.6%

• Pakistan in-shell down 12,753,386 pounds or -99.7%

• Turkey in-shell up 4,586,299 pounds or +6.14%

• UAE in-shell down 9,803,566 pounds or -23.7%

• China in-shell down 2,351,022 pounds 87.62%

• Hong Kong in-shell down 3,668,912 pounds or -99.7%

• India in-shell up 469,275 pounds or +3.8%

• Vietnam in-shell down 1,730,249 pounds or -16.1%

 

Market Recap January 2019 (PLEASE MAKE THIS A GREEN HEADER) 

 

Before we get into the details of the current walnut market, we would like to congratulate Tony Romo and the rest of the employees here at Turlock Walnut Company for obtaining Global Food Safety Initiative certification.  GFSI is a third-party organization that oversees and approves different audit platforms for meeting their criteria to ensure food facilities are processing safe food for consumers throughout the supply chain.  Our customers have asked for this certification, we listened, and were able to obtain this certification in six months with a score of 99%.  Our growers can be assured that your walnuts will be handled for with the utmost care, using the most up-to-date food safety programs and protocols in the industry to keep your walnuts safe to eat.  

 

If any local growers need walnut shell for ground cover or road base for dust control contact your grower rep or Kevin and let them know you need some shell.  We have a few truckloads to get rid of still.  Thank you.

 

In early February 2020, USDA announced that final Market Facilitation Program payments should have to shown up in farmers’ bank accounts by February 7th.  By the time you receive this newsletter, you should have received your third and final payment.

 

Tariffs continue to be a hot topic in the news.  Last month, news came out that India was increasing their tariff on shelled walnuts to 100% (up from 30%).  This is unfortunate as more shelled walnuts were making their way into India as a 120% tariff on in-shell walnuts had decreased the demand.  India is a key market going forward for the walnut industry as the global supply of walnuts increases every year.  There is currently no back-channel smuggling into India through Pakistan this year as that border remains closed.  When you combine India and Pakistan in-shell numbers from last year compared to this year, we are off about 50% into India (or 12 million pounds). 

 

The latest trade agreement with Japan has led to the removal of the 10% tariff on shelled walnuts that is effective January 1st, 2020.  This is a big deal as Japan currently buys 35 to 40 million pounds of shelled walnuts and keeps us on a level playing field against our competitors.  

 

European Union Tariffs remain at 4% for in-shell and 5.1% for shelled walnuts, all while there is no EU Tariff for Chinese or Chile walnuts.  

 

Turkey tariffs remain at 25% for both shelled and in-shell walnuts while the UAE remains at 5% for both shelled and in-shell walnuts.  

 

The market has really softened for both shelled and in-shell as buyers in many regions are holding off for further softening prices. This softening started towards the end of January and has continued for roughly a month now.  Although it is true that these months are typically slower than usual, the shipment reports are painting a different picture.  December and January have led back to back lackluster shipment numbers while the crop receipts have grown from a near estimated 630,000 tons in November to 651,000 tons received through January.  December shipment numbers were down 10% year over year while January shipment numbers were down 21% year over year. 

 

A secondary in-shell push for Ramadan never materialized in January or early February as the Middle East purchased a lot of Chinese walnuts at discounted prices of $0.20 to $0.30 in the earlier months.  Another factor affecting markets is the increase in Chandler production.  What was once thought to be a flat Chandler crop has now gone from 348,261 tons in 2018 to 389,838 tons in 2019, a 12% increase in our most marketable and exported variety.  These contributing factors have led to a larger than normal inventory glut.   

 

With Chile harvest starting up in mid to late March, we will wait and see what the initial reports of crop size and quality are getting added to the supply of walnuts. If reports of the severe drought affect crop size and quality in Chile, that would greatly help to stabilize the current market.  

 

Current walnut prices are trading at about $0.30 lower on an in-shell basis than peak levels seen back in November with very little demand for the past month.  

 

If you are not on our email list, please contact us and provide your email address. We will make sure you are sent any future emails.

 

Thank you again for your business and if you ever have any questions please call the office at 209-668-0955.

Upcoming Events

4/23/20 Booth at Stanislaus County Farm Bureau Annual Meeting 

6/3/20 Booth at Mid Valley Ag Day – Turlock Fairgrounds

6/10-12/20 WAPA Annual Conference – Monterey

11/10/20 Booth at Tree and Vine Show – Turlock Fairgrounds