Walnut Market Update, May 2022

April 2022 shipments for the California Walnut Industry totaled 67,763 inshell short tons (135,526,000 lbs), a 10.1% increase compared with April 2021. U.S. domestic shipments were 17,497 tons (34,994,000 lbs), down 20.9%. Export shipments were 50,266 tons (100,532,000 lbs), up 27.5%.

Year-to-date (YTD) shipments total 517,243 tons (1,034,486,000 lbs), down 13.1% from last year. YTD U.S. domestic shipments are 154,572 tons (309,144,000 lbs), down 7.6% to last year. YTD export shipments stand at 362,671 tons (725,342,000 lbs), down 15.2%.

Regional results for the month on the export side show Inshell shipments strongly rebounding YOY for April to the Middle East (up 582.3%), with Inshell shipments to Turkey (up 922.2% !) and Algeria (up 4,597.8% !) leading the way. Kernel shipments to Europe were up nicely at 21.5%, with Germany (up 24.8%), the Netherlands (up 23.8%) and Italy (up 427.8% !) all showing a strong month.

For Year-to-date, Inshell shipments to the key Inshell markets of Turkey (down 31%), India (down 80.3%), UAE (down 45.1%), Italy (down 16.5%) and Spain (down 16.2%) are still significantly down. Positive YTD kernel shipments to Europe (up 12.3%), especially Germany (up 18.6%), are helping the Industry to mitigate the decline in YTD Inshell shipments.

Market Outlook (Omega Walnut)

2021 California walnut crop receipts have been recorded as 720,163 tons (1,440,326,000 lbs), 7.5% above of the USDA/NASS Objective Crop Estimate of 670,000 tons (1,340,000,000 lbs). This puts total supply for the Industry at 818,217 tons (2021 Crop 720,163 tons + Carry-In 98,054 tons) or 1,636,434,000 pounds. Given year-to-date total shipments of 1,034,486,000 pounds and April purchase commitments of 369,887,835 pounds, the Industry is now over 85% sold against total supply and a notable 98% sold against the 2021 Crop. 2021 carry-out is now projected to be in the range of 100,000 – 110,000 tons, or similar to the 2020 Crop carry-out, with a general feeling in the industry that the majority of this remaining supply will be Combo and/or off-grade product.

Availability of 2021 Crop Chandler LHP 20%/40%/60% and Chandler 80% is now very limited within the Industry, with many suppliers being stocked out of these products. Demand for these Chandler products is expected to continue as we enter the summer months, with both domestic and overseas buyers wanting to ensure they have adequate inventory before they are able to receive 2022 New Crop supply. As such, prices for Chandler products will seemingly remain firm if not firm up in the short term, and we’ll need to see if and to what degree firming Chandler prices pulls up prices for Non-Chandler products.

The 2022 Chilean walnut crop size projection stands at 170,000 – 180,000 metric tons (versus 153,000 metric tons for their 2021 crop), with information from Chile indicating the crop is roughly 50 – 55% sold. The crop quality is favorable, and demand and purchasing of Chilean Chandler Inshell from India have been strong. As the global export shipment delay problem continues, origin to destination shipment timing has perhaps never been this adversely impacting on supply/demand dynamics. Ahead of our coming 2022 new crop, the California walnut industry is now closely watching the sell-through of the Chilean crop, and how successful the Chilean walnut industry will be in getting their commitments shipped in a timely manner.