We're an industry working together. Read more on who we are and what we're doing.
The California walnut. You might call it one of the hardest working nuts in the business. Demand is outpacing supply, production is growing and farm gate revenue is up. New markets are opening, new varieties are thriving, and new appreciation for the health benefits of walnuts is taking root after 20 years of smart science and, well, hard work.
An Industry Working Together
Today, growers and handlers are investing their future by planting trees, investing in technology, pursuing research, training employees, and educating consumers. Every day across California they’re working together and patiently dedicating themselves to the pure hard work of it all.
No doubt about it, there is more of that hard work to do, but the industry is in a good place to continue its success. From the promising orchards tended to by previous generations has emerged an industry worth over $1.3 billion, which continues to grow.
Continued Combination Of California Walnut Board And California Walnut Commission Is Working
For technical and regulatory reasons, efforts on the industry’s behalf are assigned to two entities – the California Walnut Board and the California Walnut Commission. But for efficiencies and logistical reasons, they operate inseparably, like two legs of a ladder connected by common rungs: one staff, one office, shared development of materials, integrated initiatives. Using this ladder means lower administrative and overhead costs.
This ladder means not just a more efficient climb, but a more effective one as well. Consider the recent success in earning access to the India market. Both entities worked together to gain access to the market for the industry. The Board evaluated the phytosanitary protocol and supported post-harvest research that was integral to India’s Ministry of Agriculture’s review process. Meanwhile, the Commission petitioned the Ministry in conjunction with the USDA’s Animal and Plant Health Inspection Service (APHIS) and Foreign Agricultural Service (FAS). The Board and the Commission used this same approach to open markets like China and Korea.
Integrated Approach Has Paid Off In Revenue, Production And Demand
- All-time high average price per pound
- All-time high crop size
- Demand exceeding supply
The benefit of this approach isn’t just in the big market wins, however. It’s also in the day-to-day successes. Last year the average price per pound to the grower reached an all-time high and production continues to grow as well — the 2012 crop was the second largest in industry history. But the best news is that demand is exceeding even that high level of supply. That’s due in large part to more than 40 years of production research, health research and consumer education and marketing.
Production research is one of the key activities funded by the California Walnut Board that has resulted in the release of game-changing varieties such as the Chandler, Howard and Tulare and the improvement of paradox walnut rootstock in the 1990s and release of disease-resistant clonal rootstocks VX211 and RX1 in 2007. The research program continues to fund studies on disease and pest-resistant walnut rootstocks and to breed highly productive cultivars with superior yield and quality attributes. Other projects under the program investigate ways to improve water management, pest management, and orchard management. This research has enabled the industry to make huge strides towards sustainability.
On the health side of the equation, the California Walnut Commission’s research program is a success story more than two decades in the making. In about the time it takes for a child to go from crib to college, the industry fundamentally changed consumers’ perceptions. In 1987 — prior to the start of the program — market research showed no consumers purchased walnuts for their health benefits. None. By 2011, 86% of U.S. consumers gave nutrition and health benefits as their top reason for buying walnuts. (Note that it wasn’t just a characteristic they associated with walnuts, it was the main reason for their purchase.) Over 100 published papers documented the research behind the rise, and several third-party endorsements gave consumers additional cause to change their mind. In 2004 the walnut was granted the first qualified health claim from the Food and Drug Administration (FDA). In 2011 the American Heart Association (AHA) granted the walnut its Heart-Check mark. And in2012 the walnut was the only nut to receive health claims in the European Union.
Of course, to keep demand ahead of supply, the industry has to constantly evaluate, develop and open new markets. The industry’s work in this area includes evaluating market potential, creating access, and then implementing a marketing program as well as work on duty reduction. For example, the U.S. - Korea Free Trade Agreement will zero out the duty on shelled walnuts by 2017. Overall, export growth is up over 400% since the industry’s marketing programs began.
More Work To Do, More Success To Earn
Record-high crops and farm gate revenues. An 86% percentage-point change in consumer perceptions. A four-fold increase in overseas shipments. What could be left to do in this apparent “golden age of walnuts”? Plenty. The only real threat to the industry’s continued growth would be in ignoring the opportunities ahead. For example:
- Although the U.S. is our largest market, only an estimated one-third of Americans are regular users, meaning there is tremendous untapped potential.
- Over the last five years, exports to China have increased nearly 10 times to 200 million pounds - it’s only the beginning.
- India is a new market for the industry, with a growing middle class and a total population of 1.3 billion. That’s a lot of potential for walnuts.
Competition is ever-present and ever-increasing though and other countries are seeking to capitalize on the growing demand for walnuts.
The California walnut industry is not starting from scratch – far from it. It has several decades’ worth of experience, relationships, research and success, and you and the rest of the industry’s 4,000+ growers and 90+ processors know what it means to work hard to create more demand, more production and more attractive prices in the years ahead.
The hard work is worth it. And it’s working.