California walnut crop declines as demand increases

California walnut crop declines as demand increases A weak California walnut crop is raising concerns that supply could fall well short of demand, causing growers to scramble to fill orders and raising the specter of even higher long-term prices for the nut.
   The National Agricultural Statistics Service projects the state's walnut growers will harvest nearly 320,000 tons of the nut between August and November.
   Growers are predicting the actual yield for the season might be closer to 300,000 tons, down about 15 percent from the 2006 yield of 346,000 tons. Growers set an all-time record in 2005, harvesting 355,000 tons.
   The weak harvest, blamed mostly on shortfalls in rain and available irrigation water, is raising concerns among growers that the nut's soaring popularity and demand in recent years could take a hit.

A California Walnut Farm

   “With a short crop, we aren’t able to service the customers we have with the same volume we had last year,” grower Jim Frazier, of Frazier Nut Farms near Waterford, told the Modesto Bee. “We did not need a weak crop, but we got it.”
   Growers typically cold store a certain amount of walnuts each year just in case the next year's crop is short. These nuts can be used to fill some of the deficit, but with demand growing so rapidly, the amount available from 2006 is one of the lowest carryover amounts in 15 years.
   “Market prices have now reached historically high levels, and the lack of adequate supply will ultimately have some impact on short-term growth in demand,” Sam Keiper, vice president for corporate affairs at Stockton-based grower Diamond Foods Inc., the nation's largest processor of walnuts told the Bee.
   Turning around the trend next year, according to industry experts, depends on a healthy rainy season and adequate availability of irrigation water. Growers in the upper Central Valley and Delta region could find this difficult, as the state is moving forward to reduce irrigation demands on local waterways in order to protect fish populations potentially threatened by water levels hit hard by years of dry weather.
   While the final per-pound price for growers this year has yet to be settled upon, experts predict it will be a record. ' Keith Higginbotham