SOURCE: Rabobank, N.A.

Rabobank, N.A.

December 15, 2015 12:45 ET

Global Consumption Growth Drives California Walnut Growers

Rabobank Report Observes How California Walnut Growers Can Continue a Positive Profitability Growth

FRESNO, CA--(Marketwired - December 15, 2015) - Positive walnut consumption growth in emerging countries like Australia, South America, South-East Asia and the European Union will drive global consumption trends in upcoming years. Consumption in more mature markets such as China and the U.S. will continue to grow, albeit at a slightly slower rate. Global walnut production will likely surpass consumption, unless mature markets increase domestic demand and/or tastes and preferences change. These dynamics and their impact on California's walnut growth is examined in Rabobank's most recent Food & Agribusiness Research and Advisory note titled "California's Great Wal-Nut: Standing Firm."

Walnut producers will need to focus on overall nut quality and production to be competitive in world trade. California walnut growers will find it more crucial to adjust their production strategy -- as older or antiquated orchards are pulled from production -- if it proves no longer profitable at the recently experienced lower prices. Along with modifying production strategies, the keys to continued global production include increasing domestic consumption and focusing marketing strategies on emerging markets. James Williamson, Associate Analyst with Rabobank and the report's author states, "Global production has and will likely continue to grow at 7 percent per annum during the next five years. At this rate, projected global walnut supply will be just over 6 billion in-shell pounds (2.7 million MT) in 2020." California walnut growers are remaining successful, despite factors such as the current water shortage in California, the strength of the U.S. Dollar, and the improving quality of the foreign competition. The research outlines these factors and how California walnut growers can remain successful.

China has recently made some infrastructure improvements in attempts to salvaging more harvestable walnuts, however, their efforts have only produced minimal results. "Chinese producers continue to change their management practices and grow a competitive product, however, they lack sufficient infrastructure to support large quantities of stored walnuts at cold temperatures. The lack of cold storage creates a breeding ground for moths, molds, and other pests, destroying millions of pounds each year," added Williamson. Due to the millions of pounds of unsalvageable nuts, China will continue to demand the exports of U.S. walnuts.

The report concludes by highlighting ways in which the profitability of walnuts can be improved, as well as showcasing California walnut growers' competitive edge. "California growers' advantage is their intimate knowledge of their customer's end use markets, their collective marketing organization, and their advanced infrastructure," states Williamson. Capitalizing on their current edge, and being proactive at improving profitability will be significant to the continued success of walnut growers in California.

The full report is available exclusively to clients of Rabobank and to 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.

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. 

Contact Information