SOURCE: Rabobank, N.A.

Rabobank, N.A.

June 28, 2016 16:16 ET

California Walnuts -- Confronting Growing Production

Higher Production and Lower Prices have Driven Greater Exports for U.S. Walnuts, Says Rabobank Report

FRESNO, CA--(Marketwired - June 28, 2016) - California walnut growers have seen a significant surge in production over the last couple of years. This spike in production, coupled with the recent decline in prices, has heavily influenced the export market for walnuts. California walnut growers have harvested over 450 thousand in-shell equivalent tons since 2010/11 -- and are expected to harvest over 620 thousand in-shell equivalent tons in 2016/17. The average production for the last ten years is nearly 65% higher than that of the previous ten years. This ongoing growth, supply and demand trend is examined in Rabobank's Food & Agribusiness Research and Advisory note titled "California Walnuts -- Confronting Growing Production."

According to the note's author, Vernon Crowder, the price of walnuts has been steadily dropping in recent years. "Market prices for California walnuts began to see a gradual decline beginning in September 2014, and a more severe drop late last season -- in June 2015," said Crowder. "In recent months. Combos -- a mix of varieties and light and dark meats -- and darker meats hit a price floor, and have since strengthened somewhat." Recent inclement weather patterns were detrimental to the walnut crop in Chile, a top producer of quality walnuts.

The report concludes by highlighting the recent increase in walnut plantings, both in the U.S. and abroad. "During the last ten years, U.S. walnut acreage has increased by 100,000 total acres -- current estimates suggest that non-bearing acreage is approximately 65,000 acres," said Crowder. "Even if older, lower yielding orchards are removed in California, its harvest is projected to be more than 700 thousand in-shell equivalent tons by 2020." The note concludes by pointing out the recent investments in marketing. Even with exports of U.S. walnuts continuing to increase, marketers are still making a valiant effort to increase domestic consumption of walnuts as well.

This report is the third of a series of research notes that Rabobank has planned to highlight the major tree nuts grown in the U.S. Research highlighting pistachios was recently released with hazelnuts, and pecans in the pipeline to be released in the upcoming months.

The full report is available exclusively to clients of Rabobank and to the media upon request.

About Rabobank, N.A.

Rabobank, N.A. is a California community bank and a leading provider of agricultural financing and full-service banking products to California consumers, businesses and the agriculture industry. With more than 100 retail branches, we serve the needs of communities from Redding to the Imperial Valley through a regional structure that promotes local decision-making and active community involvement by our employees.

Rabobank, N.A. is a division of the Rabobank Group, the premier lender to the global food and agricultural industry and a financial services leader providing commercial, retail and agricultural finance solutions in 48 countries around the world. From its century-old roots in the Netherlands, Rabobank has grown into one of the world's largest and safest banks. Rabobank, N.A. is a Member FDIC and Equal Housing Lender. www.rabobankamerica.com

About Rabo AgriFinance

As a leading financial services provider for agricultural producers and agribusinesses in the United States, Rabo AgriFinance adds value using industry expertise, client-focused solutions, and by creating long-term business relationships. Rabo AgriFinance offers a comprehensive portfolio of services that give producers the right products to prepare for, and take advantage of, market opportunities. Rabo AgriFinance representatives offer a wide array of financial services and knowledge to help customers realize their ambitions. This comprehensive suite of services includes loans, insurance, middle market agribusiness, input finance and sophisticated risk management products. Rabo AgriFinance is a division of Rabobank, the premier bank to the global agriculture industry and one of the world's largest and safest banks.

About Rabobank Food & Agribusiness Research and Advisory (FAR)

The Rabobank Food & Agribusiness Research and Advisory (FAR) group is a global team of more than 80 analysts who monitor and evaluate global market events that affect agriculture worldwide. This international team works to collect key insights into commodity markets; conduct in-depth analysis of the factors that drive sector success (or failure); and examine the megatrends that ultimately influence clients' business strategy. These analysts are internationally respected experts in sectors from protein to produce, inputs to oilseeds, and their knowledge is shared with Rabobank customers.

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