<p></p><p>Large supplies of walnuts from California and around the globe mean dramatically lower prices for the state's farmers, who say they remain hopeful the market will strengthen in the long term. Walnut marketers say they're expanding their efforts to find new customers for the crop.Harvest has started for early walnut varieties. Peter Jelavich of Hawn Ranch Co., who began harvesting Vina-variety walnuts in Sutter County last week, said he's pleased with the size and quality of this year's crop—but worried about prices."Last year, I sold some Chandler (walnuts) and netted about $1.05 a pound, and sold some other Chandlers for about 85 cents; it just depends on when it was sold during the year," he said. "I'll probably average 90 to 95 cents on my Chandlers (this year)," he added, noting that Chandlers represent up to 80 percent of walnut production and typically earn the highest price."Long term, I think things will get a little stronger for walnuts," Jelavich said. "There's a big demand for walnuts and we've proven we can sell big crops, but the prices have to be reasonable."Dennis Balint, executive director of the California Walnut Board and CEO of the California Walnut Commission, said the state has experienced increases in crop size and value for the last 10 years or more. The U.S. Department of Agriculture estimated this year's crop at 670,000 tons, up 11 percent from last year. <br></p> <p>"Each year, we would absorb 20,000, 25,000, 30,000 tons more walnuts into the world market without a hiccup, and demand remained ahead of supply," Balint said. "Then in 2014-15, we had a record crop, China had a record crop and Chile had a record crop, so we wound up with 140,000 more tons in the pipeline."The growth of California walnut plantings resulted from 2013 market conditions, when increased worldwide demand brought a record return to walnut growers of more than $1.80 per pound. In 2013, Jelavich said, the average price for walnuts reached $1.86 a pound, then declined to $1.67 in 2014.Factors working against California walnut growers include China's reduced import demand as the country's own production increases; devaluation of the Chinese currency and the strength of the dollar, making U.S. exports less competitive; and high import duties on walnuts that inflate the price of U.S. nuts.Many in the walnut business also link today's market situation to a halt in momentum caused by the 2014 labor dispute at West Coast ports. At the time, Jelavich said, a delay in shipments overseas resulted in customers abandoning contracts, then agreeing to purchase walnuts at a lesser price. <br></p> <p><b>"This is when our problems began," he said.</b></p> <p>As a result of the port labor dispute and slowdown, he said, walnut exports didn't get shipped when prices were "sky high." And when the products finally arrived at the destination, buyers did not want to pay the original market price.This season, production will come from 315,000 bearing acres, up 15,000 from 2015, according to the USDA. Balint said California's walnut acreage has increased about 70,000 acres in seven years.Also factoring into this season's supply are unsold walnuts from last year's crop. Last year, Balint said, the walnut business had an 80,000-ton carryover that was added to a 602,000-ton crop, for a total supply of 682,000 tons. This year, Balint projects a carryover of 75,000 tons."We shipped last year probably around 610,000 tons, so we shipped more than we grew and got our carryover down, so it's very, very manageable," Balint said. "The problem with the carryover is almost all of it is darker meats, not light meats, and people want the Chandlers."To improve market conditions for walnuts, Balint said, the walnut business is working to relaunch promotions of the nut as a heart-healthy snack, while continuing to promote it as an ingredient. <br></p> <p>"We have to convince people to use walnuts, and the way we do that is by showing them how. All of our research tells us that the biggest obstacle in the way of getting new users is they don't know how to use this product, even though it has been around for centuries," Balint said. "That's why last year, for the first year in history, we had a meaningful advertising program, including television, and we'll be repeating that this year."Jennifer Olmstead, director of domestic marketing at the Walnut Board and Commission, said the board works to reach domestic customers with advertising campaigns in television, print and digital media."All of our ads showcase simple recipes on how to use walnuts, whether it is entrees, appetizers, salads, vegetables and even just out-of-hand snacking," Olmstead said. "On our social media channels, the things people most like seeing are the recipes for walnuts; they are hungry for information on how to use walnuts in different ways."Michelle McNeil, director of international sales and marketing for the board and commission, said the commission focuses on building demand for walnuts in top export markets such as China, Germany and Japan. <br></p> <p>"In Asia, we are very focused on building our industrial users," she said. "We have a core sector of users in the bakery sector in Japan and increasingly in Korea. In Europe, we are very dominant in the retail market."A bright future lies ahead for the California walnut business, Balint said, adding, "We just have to be patient and understand the limitations of not being able to fix everything immediately. I think we're at a point now where we are doing the right things."Phillip Filter of Filter Farms Inc., who grows walnuts and operates a walnut dryer in Live Oak, said, "Anything that they (California Walnut Board) can do to market or develop demand for walnuts can help. That's one of the things with walnuts: We need new products, such as more walnuts going to snacks."<br></p><p></p>