Walnuts Update 16.01.25

As of the end of December, historical crop receipt levels average 98.2% based on 13 years of data. Last year, receipts reached 95% of the final crop size due to record-high harvest volumes. For this season, we estimate receipt levels are closer to the historical average, reflecting the smaller crop size. Based on these assumptions, we project the final crop size to be approximately 607,070 short tons, a 26% reduction compared to last year’s 823,540 short tons.

Gross inventories, after accounting for season-to-date sales, are approximately 73% of the previous year’s levels. By the end of December, the 2024 crop inventory is calculated at roughly 448,600 tons, compared to 611,961 tons at the same time in 2023.

Given that last year’s industry shipments from January 1 to the end of the season totalled about 517,000 short tons (adjusted tonnage), current supplies are insufficient to sustain a similar shipment volume this year.

Sales and Commitments

Sales reflect the smaller crop, with inshell sales at 67% and kernel sales at 82% of last season, totalling 78% of 2023 levels. Inshell commitments are significantly lower at 26% of last year, while kernel commitments remain strong at 87%, bringing total commitments to 79% of the previous season, or 190,000 tons versus 241,290 tons last year.

California’s low inshell commitments suggest a shift in focus to kernel sales for the rest of the season, creating opportunities for Chile’s 2025 crop, expected in March/April, to meet inshell demand in India, MENA/Turkey, and Asia.

Current Supply Status and Market Outlook

The net available inventory as of December 2024 is approximately 258,603 tons, down 30% from 370,670 tons last year. With January–August 2024 net sales totaling 275,928 tons, current inventory levels fall short of meeting last year’s demand. Careful stock allocation is necessary to bridge into the next season.

Key products are in short supply, particularly 'Export Light' and Combo grade walnut kernels. New LHP sales rely heavily on the Chandler variety, narrowing the price gap between 'Export Light' and Chandler. Not all packers can offer popular items.

California faces a critical supply shortfall. Matching last year’s January–July shipment volumes would result in a negative inventory of 82,447 inshell equivalent tons. Replicating last year’s January–August shipment volume (85,048 tons inshell, 446,007 tons kernels) is unfeasible due to limited supply.

Maintaining a carry-out inventory similar to last year’s requires curbing new sales. Tight inventories could lead to strong early-season demand for the 2025 crop. Chile’s projected 170,000 metric ton crop may help offset some shortages but won’t create oversupply, as it will absorb demand California cannot meet. Even halting all inshell shipments, California cannot fully satisfy last year’s kernel demand, highlighting the ongoing supply constraints.