A recent RaboResearch report provides insight on the walnut outlook over the coming years. Senior Analyst of Horticulture for Rabo AgriFinance, and lead author of the report, David Magaña said the U.S. remains the largest walnut exporter. However, competition from other counties such as China and Chile has been increasing in recent years. The report highlights some areas where U.S. producers still have an edge over other countries.
“Quality and food safety continue to be a competitive advantage for U.S. walnuts and U.S. tree nuts in general. This sustainability focus has been offering some opportunities,” said Magaña. “Big food manufacturers, retailers, and restaurants are setting aggressive reduction targets for greenhouse emissions. These can be beneficial to the tree nut industry, specifically walnuts, as you can get probably a long-term contract with these companies that are trying to reduce their greenhouse emissions in their supply chain.”
Other opportunities for U.S. walnuts are centered on increasing interests in plant-based proteins. Trends towards more plant-based items being offered in restaurants provide for potential growth in demand. The report also notes that California acreage is also likely to remain relatively stable in the coming years. Pricing levels are not projected to have a dramatic impact on either increasing planting or reducing acreage.
Supply Chain Disruptions Remain Challenging
The walnut outlook report also points out that U.S. walnuts have been one of many commodities impacted by supply chain bottlenecks. California produced record levels of tree nuts in general in 2020, which resulted in record shipments. Now port congestion and other supply chain disruptions are creating lower shipment levels than what was naturally expected following a record year. Magaña explained that over the last few months, logical challenges have been putting downward pressure on prices.
“We’ve seen some relevant declines in exports on walnuts and almonds as well, given the supply chain challenges,” said Magaña. “As we continue in this marketing season for the 2021-22 year, I have to admit, we’re not expecting this situation to improve any time soon. So, it is likely that we will see a high carryout this season.”