The walnut industry has hit a rough patch, leaders said Thursday near Modesto, but the long-term future looks strong thanks to consumers who see the health benefits.
Growers and processors had to deal with a West Coast port strike that slowed shipments of the 2014 crop to buyers around the world. They also face a strengthening of the dollar against other currencies, which makes exports more expensive.
And walnut inventories have surged, thanks to bumper crops last year in California and China, the top two producers by far.
“Keeping demand ahead of supply is critical to keeping our industry healthy,” said Dennis Balint, executive director of the California Walnut Commission.
He spoke at a meeting hosted by the University of California Cooperative Extension at the Stanislaus County Agricultural Center, off Crows Landing Road. It was the 45th annual gathering for industry people in Merced, Stanislaus, San Joaquin and Contra Costa counties.
Walnuts are among the region’s top crops, though not nearly at the volume of almonds. Both nuts long were considered unhealthy treats, but research suggests that they could help people control weight and fend off cancer, heart disease and other ills.
The California walnut harvest hit a record 568,503 tons last year, up 75% from a decade earlier. The industry has been able to the sell the burgeoning crop in recent years thanks to the health research, the increasing number of people with middle-class incomes and the weak dollar.
The softening in the market happened in part because of China. It is the state’s No. 1 export destination, but it also is a major walnut producer itself, and last year’s domestic harvest crowded out some of the California product.
“This has been a real challenge because of the situation in China,” said Jerry Barton, whose family grows and processes walnuts near Riverbank. “We’ll probably experience a higher carryover (inventory) than we have had in a while.”
The port strike has ended, but it has taken a while for backed-up goods to be shipped. Walnuts can be kept in cold storage while they wait, but some processors worried that buyers would cancel the deals.