The official objective estimate of the Californian walnut crop was released today at 670,000 tons on an inshell basis. This is well short of last year’s record crop of 783,000 tons and well below the industry’s subjective estimate of 723,000 U.S. tons. The average yield per acre is estimated at 1.74 tons, which is the lowest level since 2011. Strong demand and anticipation of a smaller supply for 21/22 season has driven prices higher over the past 4 months. Demand for inshell has helped to deplete last year’s record supply and is expected to play a big role again this season. Field prices were very depressed last season and many growers could not get their growing cost back. This gives processors extra incentive to maintain more sustainable grower prices for this season, if at all possible. Virtually all cost components (labor, packaging, chemicals, transportation) are higher and these higher cost will need to be recovered by processors as well. The impact of this estimate will be felt real soon, for the moment exporters are expected to stay quiet during the long weekend ahead and carefully return to the market by next Tuesday soonest. Combining this new estimate with the already empty pipelines, the question is not if prices will increase but how much they will increase.
