Nut production forecast to be plentiful
Record almond, pistachio and walnut crops are expected.

KANSAS CITY — Corn, soybeans, red meat, sugar and eggs aren’t the only commodities to see ample and in some cases record-high production and supplies in 2016. Tree nut production is expected to be higher or even record-high as well.

U.S. production of almonds, pistachios and walnuts are forecast record large, while production of hazelnuts and pecans also is forecast higher from 2015. The pecan forecast, though, may be whittled down after Hurricane Matthew destroyed some trees in top-producing Georgia.

The U.S. Department of Agriculture forecast 2016 almond production at a record 2,050 million lbs, up 8% from 2015, and walnut production at a record 1,340 million lbs, up 11% from last year and the third consecutive record crop. The pistachio estimate hasn’t been released yet, but growers have forecast the crop near 800 million lbs, nearly three times 2015 production of 270 million lbs and well above the prior record of about 555 million lbs in 2012. Hazelnut production was forecast by the U.S.D.A. at 76 million lbs, up 23% from 2015 and the highest since 2013, and pecan outturn was forecast at 263 million lbs, up 3% from 2015 but below annual totals from 2009 through 2014.

Much of the increase is related to the tree nuts being in an “up” year of their alternate-year bearing cycle. But in the longer term, the larger supplies are the result of increased area planted to nut trees, especially in California.

Records follow years of drought

Interestingly, record domestic outturn of almonds, pistachios and walnuts in California has occurred despite several years of severe drought. The drought may have slowed expansion, some experts say, but it hasn’t stopped it. Hazelnuts are grown almost exclusively in Oregon. Pecan production is more widespread, mainly across the Southeast. Increasing domestic demand, in some cases “created” demand through active advertising campaigns, strong export demand and profitability for growers has spurred nut tree planting in the state. Demand has received a boost in part due to the positive health attributes of most nuts.

According to the University of California’s Cooperative Extension Service as reported by the Capital Press, in established orchards, almonds cost $3,890 per acre to produce and return $5,000; walnuts cost $4,703 to produce and return $5,875; and pistachios cost $4,984 to produce and return $7,224.

Bearing almond area was estimated at 900,000 acres in 2016, up 10,000 acres from 2015 and more than double 1996 area of 428,000 acres. California walnut area was estimated at 315,000 acres in 2016, up 15,000 acres from 2015 and up 64% from 192,000 acres in 1996. Pistachio area was estimated at 233,000 acres in 2015 (latest available), up 12,000 acres from 2014 and 3.6 times 1996 area of 64,300 acres. Hazelnut area in Oregon has been more stable, holding near 30,000 bearing acres for several years.

Prices received by growers have declined from recent highs. According to the U.S.D.A., almond prices in 2015 (marketing year) averaged $2.84 per lb, down 29% from a record $4 in 2014. Walnut prices averaged 81c a lb in 2015, down 51% from 2015 and down 56% from a record $1.85 in 2013. Pistachio prices average $2.48 a lb in 2015, down 31% from a record $3.57 in 2014 and the lowest since 2011. Hazelnut prices averaged $1.40 a lb in 2015, down from a record $1.80 in 2014. Initial minimum price indications for the 2016 crops were $2.50 a lb for almonds, $1.70 to $1.80 a lb for pistachios and $1.18 a lb for hazelnuts, according to the Capital Press.

Supplies weigh on prices

Higher production and increased foreign competition (more bearing acres in other countries, especially China, which has reduced foreign demand for U.S. nuts) have pressured prices, and there is debate about how much longer rapid expansion may be sustained, especially considering the high cost of establishing an orchard and ongoing water issues in the West.