SACRAMENTO — A commodity group will continue a major push to build a bigger U.S. market for walnuts to try to offset receding prices to growers, its leader says.
The California Walnut Commission, which has invested more than $17 million in the last two marketing years to boost domestic consumption, will continue to spend heavily on the effort, chief executive officer Dennis Balint said.
“The reason for that is simply that it’s a market we believe is underdeveloped,” he said.
Market studies have shown that as of the beginning of this year, about 22 percent of American households consumed walnuts, Balint said. Future efforts will include showing consumers simple ways they can incorporate walnuts into their diets while touting the nut’s healthful attributes, he said.
“We have to treat this as almost a re-launching of walnuts in the United States,” Balint said. “You need the right product, the right package, the right price and the right program. That combination … will encourage trial and repurchase and will encourage reuse and increased purchase by our core consumers.”
If the marketing effort can increase walnut consumption to 30 percent of American households in the next five years, that would absorb half the additional volume the industry is expected to produce, Balint said.
A recent report by Rabobank predicts that California walnut growers will harvest 620,000 in-shell-equivalent tons in 2016-17, up from an estimated 575,000-ton crop last fall. California’s 300,000 bearing acres of walnuts in the most recent harvest was up from 290,000 acres in 2014 and 218,000 acres in 2008, according to the National Agricultural Statistics Service.
The production boom comes as growers are experiencing their first protracted price slide in years, as the average price per pound to the grower has dropped from $2.05 in 2013 to about 85 cents.
Balint agrees with other experts that the softening prices will eventually cause acreage and production to level off, although he cautions that each of the state’s nearly 4,400 growers and 92 packers and handlers will “make decisions based on what they think is best for them.”
The Walnut Commission hasn’t set any kind of a goal of hitting a certain price by a certain date, “but we know that as demand increases to the point where demand exceeds supply, we’ll start to see prices go up,” Balint said. “That’s a world market situation — not just the U.S. but the overseas market as well.
“For years and years, we did very little if anything to develop the U.S. market,” he said. “All of our growth has come from the export side, so this is enormous potential that the (domestic) market holds.”