California Walnuts - NOVEMBER 2017 WALNUT MONTHLY MANAGEMENT REPORT

On Friday,  December 8th, the California Walnut Board released the November 2017 Position Report.   Shipments for the month ended November 2017 were down approximately 9.9% versus November 2016 shipments and for the 3 months ended November 2017 were down approximately 21.3% from the same 3 month period the year prior.   For your review is a summary comparison on an inshell comparable basis using an identical shell out rate of 44.1% for both years:

                                       Inshell             Inshell
Equiv.              Equiv.
Tons               Tons             %
Nov. 2017       Nov. 2016     Chg

Crop Receipts                   614,565        675,797    -9.1%
Total Supply                      670,541        740,967    -9.5%
Monthly Shipments             99,091        109,939    -9.9%
Export Shipments               74,785          85,099   -12.1%
Domestic Shipments           24,306         24,840    -2.1%
YTD Shipments                 229,891       292,102   -21.3%
YTD Export Shipments      164,603       220,630   -25.4%
YTD Domestic Shipments    65,288         71,473   -8.7%
Inventory                             440,650      448,865    -1.8%
Shipments as % of Crop        37.4%        43.2%
Shipments as % of Supply     34.3%        39.4%

Shipments for the month of November 2017 and YTD are underwhelming yet packer's do not seem daunted.  They point to a slow start to the harvest by 2-3 weeks and purposely conservative sales due to a smaller and less definitive crop.

Receipts through November 2017 were 614,565 inshell equivalent ton compared to 675,797 the prior year, or down 9.1%.   Last year’s final production was 686,000 ton indicating another 10,203 ton received in after November 2016.  However, due to this year's lateness,  the crop may “catch up” a bit and many believe there is still an additional 10,000 to 20,000 ton still to come in.  The 2017 California walnut production was forecast at 650,000 ton so it appears that making this estimate is highly unlikely and the final crop receipts will still be close to the 9.1% that they are behind YTD.

Year to date supply for 2016 had carry in of 65,170 ton plus November 2016 YTD receipts of 675,797 ton equated to a total supply of 740,967 ton.   For the same period in 2017,  carry in of 55,976 ton plus November 2017 YTD receipts of 614,565 ton had total supply at 670,541 ton,  down 9.5%.

Shipments as a percentage of supply are 34.3% for 2017-2018 versus 39.4% for 2016-2017 or a roughly 5% decline.
-  YTD Export shipments of 164,603 ton are down 25.4% and YTD Domestic shipments of 65,288 are down 8.7%.  Total YTD shipments are down by a significant 21.3%.

Color Quality is excellent in spite of sweltering summer heat and a record number of over 100 degree days.   There is a tremendous amount of good quality light material but conversely a real shortage of combo color; a double edge sword.  The decline in the availability of combo color and a higher percentage of light color continues to put a tightening on the spread between these two items with good momentum upward on combo prices and a flattening of prices of light material.  Additionally, both light and combo pieces of all sizes are hard to come by and not expected to get any better as the year moves on.