California Walnut industry facing problems?

California Walnut industry facing problems?

posted by: client.web date: Sep 05, 2014 category: Latest News comments: Comments Off on California Walnut industry facing problems?

California is coming to the conclusion a bigger crop can only be sold when buyers also buy more. This basic fact is exactly the problem the Californian industry is confronted with at this moment. Indeed the empty pipelines caused buying interest for the first shipments – backing the euphoria of the industry – but then it stopped. Chinese as well as Turkish and European buyers strongly believe the Californians shall have to give in as they stay away from the market.

At the moment we see the first weakness in the prices from California. Question remains will buyers need quickly a ‘refill’, which will support the higher prices, or will the Californian industry need to sell and make their prices more attractive. Underlying problem for the industry is the attitude of the farmers, who believe prices can only go up and expect processors to pay a higher price. With this myopia however they neglect what is happening in the rest of the world. For example a big crop in China, may cause Asiatic demand to fall substantially. Also other origins have invested in new walnut acreage, which will create more competition on the supply side in the coming years.

 

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