advances in walnut production uc davisadvances in walnut production uc davis november unless...
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Processing and Marketing California Walnuts Charles R. Crain, Jr.
Advances in Walnut ProductionUC Davis
November 5, 2018Unless otherwise noted, statistical data sourced from CWB, CASS, NASS and USDA.
Introduction
Family Owned and Operated since 1961
Growers, Processors and World Wide Marketers
Grower Base Throughout all Major Growing Regions
Retail, Food Service, Ingredient Manufacturers
Headquarters in Los Molinos, CA
1
Crain Walnut Shelling and C.R. Crain & Sons
2
Processors’ Goal – Produce What Consumers Want
Premium Variety Characteristics and Values
Supply Trends
Key Markets
Global Production
Marketing Hurdles
Looking Forward
Today’s Discussion
3
Processors’ Goal Produce What Consumers Want to Buy
4
Color is King
5
USDA Walnut Color Chart
6
Premium Variety Characteristics and Values
7
Premium Variety Characteristics and Values
Produce What Consumers Want
IN-SHELL PREMIUMS KERNEL PREMIUMS
In-shell SizeShell Cleanliness Light Kernel ColorHigh Kernel YieldVoid of Shell DamageVoid of Kernel Damage
Light Kernel ColorHigh Kernel YieldHalf YieldVoid of Damage
8
LCHANDLER VARIETY INSHELL
Super Jumbo34 mm +
Jumbo32–34 mm
Large30–32 mm
Larger In-Shell Size and Smooth Shell Characteristics
9
Kernels Characteristics
10
In-Shell Characteristics
11
Premium Varieties
Producing What Consumers Want to Buy
Chandler– Smooth Shell– Light Kernel Color– Thin Shell– High Half Yields– Varietal Recognition
Howard– Large In-shell Size– Superior Flavor Profile– Thicker Shell Suitable for
Inshell Market– Varietal Recognition
Tulare– High Kernel Yield– Early Harvest
Hartley– Shape– Thicker Shell Suitable for
Inshell Market– Varietal Recognition
Perceived Quality Characteristics
12
2018 Crop Est.
California Production By Variety
Chandler52%
Hartley 6%
Howard 13%
Tulare 16%
Serr 3%
Vina 4%Other 6%
Data from CWB, CASS, NASS and USDA. 13
Supply Trends
14
In-Shell Basis (Tons)
California Walnut Crop Size
Data from CWB, CASS, NASS and USDA. *CASS September Objective Measure.
Crop Size
436,000
437,000
503,000
460,000
497,000492,000
571,000 603,000
686,000
628,000
690,000*
300,000
350,000
400,000
450,000
500,000
550,000
600,000
650,000
700,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018*Crop Year
+9.9%
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In-Shell Basis in Tons
Source: USDA, *CWS Estimate
California Walnut Crop Projection
460
497492
571603
686
628
691*730
700
740
400
500
600
700
800
900
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Future Crop Size Estimate
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In-Shell Basis in Tons
Chandler
Data from the CWB. * Statistical extrapolation from USDA CASS Objective Survey.
226,055255,076
288,991
366,785 358,777361,000*
200,000
250,000
300,000
350,000
400,000
2013 2014 2015 2016 2017 2018 Est*
0.6%
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In-Shell Basis in Tons
Data from the CWB. * Statistical extrapolation from USDA CASS Objective Survey. CWB *Statistical extrapolation from USDA CASS Objective Survey
Howard
69,577
79,26483,863
90,338
100,153
93,000*
60,000
70,000
80,000
90,000
100,000
110,000
2013 2014 2015 2016 2017 2018 Est*
-7.1%
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In-Shell Basis in Tons
Data from the CWB. * Statistical extrapolation from USDA CASS Objective Survey.
Tulare
63,235
74,758
85,650
84,863
71,671
111,000*
63,000
73,000
83,000
93,000
103,000
113,000
2013 2014 2015 2016 2017 2018 Est*
54.9%
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In-Shell Basis in Tons
Data from the CWB. * Statistical extrapolation from USDA CASS Objective Survey. USDA CASS Objective Survey
Hartley
52,089 51,694
45,039
56,353
35,226
40,500*
30,000
40,000
50,000
60,000
2013 2014 2015 2016 2017 2018 Est*
15%
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In-Shell Basis in Tons
Data from the CWB. * Statistical extrapolation from USDA CASS Objective Survey.
Other Varieties
79,597
107,738
98,725
85,999
61,971
84,500*
60,000
70,000
80,000
90,000
100,000
110,000
2013 2014 2015 2016 2017 2018 Est*
36.4%
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Varietal Production
Producing What Consumers Want
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
2012 2013 2014 2015 2016 2017
In-S
hell
Equi
vale
nt T
onna
ge
Chandler Howard Tulare Hartley All other
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Export vs. Domestic ShipmentsIn-Shell Ton Equivalent
42% 36% 37% 37% 32% 34%
58% 64% 63%63%
68%66%
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2012 2013 2014 2015 2016 2017Crop Year
Domestic Export23
Kernel vs. In-Shell Shipments
0
200
400
600
800
1,000
1,200
1,400
2012 2013 2014 2015 2016 2017
Crop YearKernel In-Shell
26%30%30%
23%24% 24%
70% 70% 74% 76%77%76%
In-Shell Equivalent in Pounds (Millions)
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Key Markets
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2017
Top In-shell Consuming Countries
Sales in Millions of lbs. For the Crop/Marketing Year Listed: *Includes China, HK and Vietnam.
Turkey21%
China Bound10%
Italy11%
India6%
U.A.E.7%
Spain 5%
U.S.A. 6%
Germany 3%
All Other31%
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2017
Top Kernel Consuming Countries
U.S.A.43%
Germany13%
Japan10%
Korea6%
Spain 5%
Canada 2%
Israel 2%
Australia 2%
Netherlands 3%All Other
12%
Sales in Millions of pounds for the Crop/Marketing Year Listed. 27
Global Production
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In-Shell Short Tons
Global Production
INC/USDA/Industry Experts *Calculation Change
Country 2015 2016 2017 2018Projection
% Change(‘17 vs ‘18)
U.S.A. 603 684 628 690 9.9%China 639 992* 924 825 -10.8%Turkey 22 22 29 28 -3.4%East Bloc* 240 177 245 255 4.1%Iran — — 105 99 -5.3%Chile 79 79 117 148 +17.9%France 44 40 39 39 —India 38 40 39 39 —Italy 19 17 20 18 -10.0%Global 1,684 2,051 2,146 2,141 -0.2%
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USA 49%
Ukraine 11%
Chile 8%
Moldova 7%
China 3%
Romania 3%
Germany* 3%
India 2%
Others 14%5-Year Average
Exporting Countries
*Transit Country 30
Marketing Hurdles
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Export Tariffs and Currency Roadblocks
March 8th - U.S. Secretary of Commerce announces tariff on steel and aluminum imports of 25% and 10% respectively
June 1st - tariffs went into effect. Immediately thereafter the retaliatory walnut tariffs came into effect
Walnuts were not included in China’s list of tariffs to be imposed effective September 24th.
Turkey’s unofficial ban on issuing permits to free enterprise zone has (reportedly) been lifted.
Country2017 January 1, 2018 Current
In-Shell Kernels In-Shell Kernels In-Shell Kernels
China 40% 35% 40% 35% 65% 60%
India 30% 30% 30% 30% 100% 30%
Turkey 43% 43% 15% 15% 25% 25%
Data provided by the CWB 32
Looking Forward
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Larger Crops Projected
Reduce Dependence on China & Turkey
Increase Domestic Demand
Promote Superior California Crop Characteristics
Promote California’s Food Safety Environment
Produce What Buyers Want to Buy
Reduce Trade Barriers
Looking Forward
34
Thank you