Nuts

Market Insights


May 2023

Walnuts

The CWB reported crop receipts for the 2022 crop year remains unchanged at 747,870 tons. This number has historically been adjusted up by end June and we expect the final crop number to be closer to 760,000 tons. Adding in the record 2021 crop carry out, this would give us a total supply of ~895,000 tons for the 2022 crop year. This is a record total supply for the CA Walnut Industry and 8% larger than the 827,824 tons of total supply last year.

Shipments in April were down 17.6%. This comes after 3 months of strong shipments, bringing the YTD shipments to 518,870 tons (+0.5% vs last year). Exports continue to underperform and are the main driver to the overall poor shipment month (-27% vs last year). Unshipped inventory is now estimated to be ~375,000 tons, this is 21% higher than last year when we had 8.3% less total supply. The USDA section 32 purchase is expected to help ease some of the surplus, but additional sales and shipments are needed to help lower the carry out and bring supply and demand back into balance.

Reported commitments in April were up 2% vs last year and new sales FTM were up 80% vs last April. This is a direct result of the USDA purchase helping move the market in the right direction. The sold percentage of total supply is estimated to be 80.3%, down 5.8% vs last April’s sold percentage of 86% on total supply.

Our carryout projection has been updated to 153,000 tons (11.9% higher vs last year). The USDA purchase appears to have accomplished the desired objective by reducing the lower quality combo inventory out of the market. We have already seen some positive outlook on pricing, which should be indicative of the lower supply. We expect domestic shipments to finish strong through the end of the season but will need exports to pick up in order to lower the carryout.

Bullish Trends

  • The USDA recently closed a very large bid, helping to ease the supply concerns
  • Shipments are now up 0.5% YoY
  • Walnuts remain the best value when compared to competing nuts

Bearish Trends

  • CA has a record total supply this year
  • Sold percentage of total supply is 5.5% lower than this time last year
  • Other origins continue to increase in production as well, with Chile currently harvesting their 2023 crop
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