California Walnut Market Takes Big Hit After Exports To China Drop 60 Percent In November
SACRAMENTO (CBS13) — Walnuts generate $1.4 billion in revenue for California growers, but their largest exporter didn't come through in 2014.
California lost a large chunk of its Chinese business, leaving growers worried about losing its big buyer.
"The Chinese were concerned, I think, the prices were a little higher than they should have been," said Mat Conant, president of Conant Orchards. "and so they basically pulled out of the market and bought very few walnuts in California this year."
He also says the Chinese were able to produce more of their own walnuts in 2014. According to the California Walnut Board, exports to Hong Kong were down more than 60 percent in November compared to 2013.
Now the question is, who will replace that demand?
"India has bought quite a few walnuts this year and are increasing," Conant said. "But they're still nowhere compared to the number that the Chinese bought."
Less demand, means walnut prices are falling.
"Income would be down $1,200 an acre," he said "That's a significant hit to the grower."
Does that mean there will be lower walnut prices on grocery shelves?
"They might drop a little bit—not this year, but the following year," Conant said. "But I think it's insignificant, the amount, unless the prices go radically lower, which wouldn't be good for the walnut industry."
Conant says he's seen many ups and downs in the walnut industry, and he hopes it's just a short-term dip. He thinks the Chinese will be drawn back because of the stringent growing standards in the United States.
"I think it's going to take a couple of years to see if the Chinese come back into the market or not, and I kind of think they will," he said.
If and when China returns to the walnut market at full strength, Conant says he expects prices will stabilize instead of spiking again.
