Optimism and Call for Unity at Recent Walnut Industry Conference - West Coast Nut

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Optimism and Call for Unity at Recent Walnut Industry Conference

By Marni Katz | Editor
Published: April 9, 2021 • 117 views



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    Speakers at the California Walnut Board’s virtual industry conference expressed optimism despite the challenge of low prices, buoyed by a positive marketing outlook once trade and COVID disruptions normalize and the supply demand curve begins to stabalize.

    Over the last decade, walnut production has grown in California to a record this year of 784,000 tons—a 19% increase over the previous year’s production. New plantings mean an additional 54,000 tons will come into production over the next four years, bringing a projected California crop of 835,000 tons on 435,000 acres, said Michelle Connelly, CEO of the California Marketing Board and Commission.

    Add to that increased competition from other walnut producing countries, such as Chile and China, and the industry will have more nuts to move in increasingly competitive international markets. Connelly said the Board and Commission are strategically targeting their research, regulatory and marketing programs with this future production and competition in mind.

    In addition to developing a five-year goal of moving an additional 196,000 tons, the Walnut Board is funding production research to protect the profitability of growing walnuts and postharvest research to protect the marketability and selling walnuts.

    “As you know, it’s been a very difficult year, and it’s going to take all of us working together to move us forward,” Connelly said.

     

    Handler Optimism

    “We have an optimistic outlook in the long term, even though we are facing near-term hurdles right now” said Jack Mariani of Mariani Nut Company in Winters, Calif.

    California walnut growers recently approved an amendment to the federal marketing order that provides walnut handlers a credit back for their own targeted marketing and promotions of 70 cents for every dollar spent.
    Mariani said the new credit back provision will have multiple benefits to the industry and allow processors to target their investments into new products and new areas.

    “We expect credit back to make a significant contribution in expanding walnut sales and consumption,” Mariani said, following his presentation. “A handler can now focus specifically on an individual product or more in what they feel is worth investing their own marketing dollars.

    “This is especially important in new product development like flavored walnuts, walnut butter and walnut milk,” he continued. “These are all areas where walnuts are underrepresented in the market and where substantial sales growth is possible with targeted marketing.”

    Chuck Crain, a grower and processor with Crain Orchards Inc. and Crain Walnut Shelling in Los Molinas, Calif., said recent home baking trends have boosted regional business and that the industry should be able to maintain those higher levels of retail consumption even as foodservice channels normalize once restaurants open and trade barriers are reduced.

    “Obviously these are difficult times with grower prices at a level below the cost of production. We need to remedy it as fast as we can using all the tools in our toolbox,” Crain said. “And we do much better working together as we can working independently.”

    Laurie Demeritt of the Hartman Group discussed some of the changes in the retail sector that could help position California walnuts well.

    She noted that 84% of respondents in a recent study on food sourcing had changed the way they shop in the last year. Shoppers are price conscious and also focused on supporting local businesses and workers. They are also revisiting “center store” food categories in the search for shelf-stable ingredients. Demeritt said the walnut industry needs to ensure its packaging ensures products stay fresh, healthy and safe.

    Darci Vetter, a leading expert on agricultural trade issues with Edelman, discussed trade policy and the outlook for easing trade tensions given the new administration’s worker-centric and “America first” trade policy. Those policies are likely to bolster domestic production, she said. In the short term, she said tariffs and retaliatory tariffs with China are likely to remain in place as new trade policies are developed with those priorities and the environment and human rights issues in mind. It is likely the U.S. will be more engaged in multilateral trade agreements moving forward, however.

    Chuck Conner with the National Council of Farmer Cooperatives said climate change is also likely to play a large part in the new Biden administration, and agricultural groups should not hesitate to find a seat at the table.
    Conner is part of the Food and Agriculture Climate Alliance, which includes ag, forestry, food and environmental groups all working together to help guide policy. Ideally, he said, being part of the solution will help develop climate policies that can actually enhance farm income, such as technical assistance and cost-share programs to implement new climate-friendly technologies.

    “I actually welcome the climate debate in the Congress,” Conner said.

    “If we’re not at the table, we’re on the menu,” added Bill Carriere, a fourth-generation farmer from Glenn, Calif.