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November 7, 2018 - By Christine Souza - Moderate, dry weather benefited California walnut farmers during harvest, but they say dark clouds loom overhead in the form of retaliatory 4540 p1 20181031glennwalnutsCAS21trade tariffs imposed on the U.S. by three of the crop's primary export markets.

"A struggle we've had is this tariff issue, especially with China and some of our other markets," said Glenn County walnut farmer and processor Bill Carriere, chairman of the California Walnut Commission. "The tariffs have really depressed the price and turned the overall sentiment of some buyers a little bit cautious."

(Left) Waiting for the last few truckloads of harvested walnuts at his handling facility, Glenn County walnut grower Bill Carriere says he expects this season’s crop to be slightly smaller than the U.S. Department of Agriculture forecast of 690,000 tons. Carriere says lower yields in the Chandler variety in the northern part of the state may mean production could reach between 675,000 and 680,000 tons. Photo/Christine Souza

At Carriere Family Farms, a grower, processor and handler of California walnuts, most of the company's walnuts are exported, including to a European partner. Tariffs placed on California walnuts present an additional trade disadvantage and could affect price, Carriere said. California Walnut Commission Chief Executive Officer Michelle McNeil Connelly said retaliatory tariffs have been imposed in several key export markets, including China, India and Turkey, "which threaten the stability of our industry, our producers and our competitiveness in the global market."

She said the commission is working with the U.S. Department of Agriculture, U.S. Trade Representative and congressional offices, to keep walnuts in the forefront of trade discussions, in addition to working with USDA to provide some interim relief to farmers and processors.

The state's walnut business will lose about $600 million due to the retaliatory tariffs, Carriere said, noting that walnut growers expect to benefit only slightly from mitigation measures to help farmers affected by tariffs. These include food purchases, trade promotion and export development.

He reported negotiations underway in several countries in an attempt to reduce tariffs, and expressed hope the commission's efforts "will increase sales and bring the price up."

"The demand for walnuts is good," he said. "We are selling at a normal pace and we're on track to sell the crop."

Retaliatory tariffs are also a concern for Kevin Chiesa of Ron Martella Farms in Hughson, which processes and markets walnuts through its company, Grower Direct Nut Co. The company processes in-shell, shelled and diced walnuts sold to food processors, retailers and produce markets, with about 60 percent of sales to export markets.

"The tariffs have definitely affected us," Chiesa said. "Sales have been slow. China is a big in-shell buyer, which helps you move a lot of product early on. (With the tariffs) you end up having to hang onto those walnuts, crack them open and try to sell them during the year."

Connelly said negotiations continue between the U.S. and China.

"There have been some indications that a deal could be imminent," she said, when President Trump and Chinese President Xi Jinping meet at the Group of 20 summit in Argentina later this month.

In addition, Connelly said, India recently postponed further retaliatory action against the U.S. until mid-December.

"Dialogue between the U.S. and India is ongoing, and we hope that there will be some resolution to the base-rate tariff increase as a result of these discussions," she said.

Until the tariff issue is resolved, many California walnut farmers are focusing sales in the domestic market and in countries outside of China, India and Turkey.

"There's always a concern that maybe you won't sell the whole crop because it's a big crop. You have to adjust and find other markets; you've got to keep it moving," Chiesa said.

In the meantime, the Walnut Commission said it will continue efforts to grow walnut demand in the domestic market.

"The domestic market is still our biggest market and has a lot of potential," Carriere said. "Americans per capita eat fewer walnuts than a lot of countries, so we think that we can increase consumption here. Walnuts are healthy, and we've concentrated on domestic advertising that resonates with consumers, such as putting walnuts in everyday foods."

USDA estimated California could produce a record crop of 690,000 tons of walnuts, up 10 percent from last year. But lower yields in certain orchards have led some growers to believe the crop may not reach the 690,000-ton figure.

"Here in Northern California, where a majority of the Chandler walnuts are grown, yields are down significantly," Carriere said, "with some orchards down by 30 to 40 percent compared to last year. I'm hoping that we (in California) make 675,000 to 680,000 tons."

For other varieties, such as Tulare and Serr, yields were much better, he said, although many blocks in the area showed reduced yields of about 25 percent compared to last year.

Chiesa, in his part of Stanislaus County, said yields look better, with good quality overall.

"Walnut harvest is fast and furious," he said. "It started about a week late and we are still going for another week and a half with the Chandler variety. Tonnage is up a little bit and certain varieties, such as Tulare and Vina, are up."

California's walnut crop, valued at $1.59 billion last year, is grown on about 350,000 bearing acres.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)
Reprinted with permission: California Farm Bureau Federation