California walnut farmers say they knew the great prices of 2014 couldn't last. In that year the prices paid for Valley walnut growers' harvests topped $2 a pound for higher-quality nuts. Walnut growers haven’t been told how much they’ll get for the nuts they sold last year, but some experts estimate that top prices may be no higher than 75 to 80 cents per pound.
Those declining prices are the result of a “perfect storm” of events coming together last year, including China becoming a bigger player in the nut-growing industry and U.S. growers becoming victims of their own success, said Sam Sciacca, a longtime walnut grower and owner of Moody Walnut Dryer.
For years, walnuts have been one of the more stable and valuable agricultural commodities in the Central Valley — where about 90 percent of U.S. walnuts are grown. As a result, over the past decade, farmers have planted more trees to expand their acreage, while others replaced other crops with walnuts in hopes of better returns.
Many trees reached maturity in the last year or two, elevating the supply of commercial walnuts in the state to the point that prices are dropping, Sciacca said.
In addition, China, normally a major buyer of U.S. walnuts, is expanding its own walnut industry and competing with growers here. A strengthening U.S. dollar compared to the Euro, is also hurting prices.
Yet, Sciacca said losses in walnut sales to China are being partially offset with increased sales to India. He has also heard that the lower nut prices are helping improve sales momentum for other overseas markets.
As for what this means for next year, isn’t clear: 2015 was a “bumper” year for walnut growers, with heavier-than-average production per tree that generated a record 575,000 tons of nuts, according to industry estimates.
The industry was left with about 60,000 tons of unsold walnuts from last year — 20,000 tons more than average — which will have to be sold this year with the new nuts, Sciacca said.
A “bumper” harvest tends to be followed by less productive years, which should help reduce the glut of walnuts on the market and help elevate prices.
