Nut Market Update

July 16, 2009


On June 30, 2009, NASS released their 2009 Objective Almond Crop estimate projecting a crop of 1.350 billion pounds (kernel basis).  This is down 7% from the May Subjective Estimate and approximately 17% lower than 2008 crop receipts (currently 1.612 billion pounds).  With shipments setting new records each month, it is estimated that the industry will carry out approximately 430 million pounds.  While prices on most varieties, excluding Nonpareil, had remained relatively weak since the release of the May Subjective Estimate, heavy shipments to Asia and the Middle East have helped to firm the market slightly.  Even though the Objective estimate is much closer to what most in the industry had been projecting for sometime now, prices will probably continue to remain very competitive moving into the fall.  Until the industry is able to compare actual 2009 crop receipts to the estimate (sometime in October/November), and assuming that current crop projections for Walnuts and Pecans are accurate, expect Almonds to continue to be the best value for the money.


For the sixth straight month, Walnut shipments have set new records.  Like Almonds, shipments to Asia and the Middle East have turned a huge oversupply situation into a very manageable position.  Based on current estimates, the 2008 carry out could well be below 60,000 tons (inshell basis); a far cry from earlier projections of 145,000 tons (inshell basis). As such, supplies of both regular Combination and Light product are in very short supply. Even with current estimates for the 2009 crop hovering in the 375,000 to 400,000 ton range (inshell basis), prices have finally started to firm. Current prices for regular Combination Halves & Pieces are now in the $2.15 to $2.25/lb range with Light Halves and Pieces trading in the $2.30 to $2.40/lb range. If as currently expected 2009 Pecan contract prices remain at or near the $3.00/lb level, as long as the Walnut prices do not increase much higher than current levels, demand should continue to remain very good with little or no consumption being lost to Pecans.


The Turkish Government, Ministry of Agriculture, released their estimate for the 2009 Hazelnut crop projecting the crop to be 494,924 metric tons (in-shell basis). Many within the industry feel that the crop will actually be closer to 550 to 600,000 metric tons. August 31, 2009 carry over from previous crops is estimated to be around 50,000 metric tons (inshell). Further, it is estimated that about 535,000 metric tons is being held by TMO (State owned) which will not be sold until mid of Jan 2010 at the earliest.  Included in the estimate release was a statement by the Government that TMO will not buy any Hazelnuts from the farmers during the coming year.  This will hopefully help to finally bring pricing in line with supply.  However, the Government has made similar promises in the past.