California English walnut prices and U.S. almond imports may both reach record highs while pistachio prices already are at historic levels this year due to smaller-than-expected crops and strong export and domestic demand for tree nuts amid continued positive health claims.

Almond prices are up about 10% to 15% from a year ago, walnut prices are up about 10% and pistachio prices are holding at record highs achieved at the end of last year, all because of disappointing crops, said Bobby Tankersley, senior vice-president of procurement and commodity risk management for John B. Sanfilippo & Son, Inc., which markets the Fisher nut brand. The pecan crop is “disappointing” in the Southeast but “good” in the West with supplies adequate due to a large carryover and prices up slightly, while hazelnut supplies are “normal,” he said.

A recent article in the Capital Press indicated some California growers were receiving more than $2 a lb for walnuts for the first time ever, compared with averages of $1.46 a lb last year and 64c a lb in 2008. Payments from handlers typically begin in December but don’t conclude until spring.

The United States accounts for about 80% of world almond production and 90% of exports, and about 45% of global walnut production and more than 60% of exports, according to data in the U.S. Department of Agriculture’s November Tree Nuts: World Markets and Trade report, which focused on almonds and walnuts.

“Global almond production for 2013-14 is forecast lower while consumption is expected to continue rising, drawing stocks down sharply, particularly in the United States,” the U.S.D.A. said. “U.S. production is forecast 2% lower to 839,000 tonnes (1,850 million lbs) as weather problems again reduce output. Yields are forecast down 5% following the lowest kernel weight in 40 years combined with fewer nuts per tree. Exports are forecast to rebound 6% to 615,000 tonnes on rising shipments to China and Europe. As a result of lower available supplies, record imports of 25,000 tonnes are forecast to satisfy expanding consumption.”

Mark Jansen, president and chief executive officer of Blue Diamond Growers, a California almond processing and marketing cooperative owned by half of the state’s growers, noted in an update published on the cooperative’s web site that this year’s almond crop had the “smallest average kernel size the industry has ever handled,” while truly large almonds were scarce. He said the strong sales pace to date was “unsustainable” and “prices will rise to balance supply and demand,” even with the crop coming in slightly above the U.S.D.A. forecast.

In a November market update on its web site, Bill Morecraft, general manager of Blue Diamond Almonds, said, “It appears most markets are buying hand to mouth not wanting to take long-term positions with the current price levels … with no markets being covered past the end of the calendar year.” Still, the crop was “easily over 50% sold,” he said.

“Commitments are strong, running ahead of last year nearly 12%,” he said. The situation points to “a very strong shipment and demand scenario for the start of the 2013 crop year and … for the foreseeable future.”

Data from the U.S.D.A. indicated 2013-14 U.S. almond ending stocks at 79,900 tonnes, down about 45% from both last year and the prior five-year average and the lowest since 60,759 tonnes in 2006-07. Global ending stocks estimated at 100,000 tonnes were down by similar percentages and also the lowest in seven years.


Walnuts in demand

For walnuts, the story is a bit different but the result is the same.

“Record global walnut production and trade is forecast,” the U.S.D.A. said. “U.S. production is forecast down marginally to 449,000 tonnes (990 million lbs). Although bearing area increased 5% and benefited from a longer bloom period, it was offset by record-low average nut set of 1,239 per tree, down 10% from last year.”

In fact, bearing area of walnut trees was a record high in 2013 at 255,000 acres, according the California Walnut Objective Measurement Report. Almond bearing area at 810,000 acres also was record high in 2013, according to the California Almond Objective Measurement Report.

The U.S.D.A. estimated U.S. walnut ending stocks at 30,000 tonnes in 2013-14, down about 30% from a year earlier and from the prior five-year average and the lowest since 20,000 tonnes in 2007-08. World ending stocks of 59,200 tonnes were down about 25% from 2012-13, down over 30% from the five-year average and also the lowest in six years.

Booming export demand, especially from China, in recent years has sucked up much of the world’s nut supplies. For example, China’s 2013-14 almond imports are forecast at 120,000 tonnes, nearly four times the 2008-09 level, while forecast walnut imports of 150,000 tonnes are more than four times those of 2008-09, according to U.S.D.A data.

At the same time, domestic demand also has increased, in part due to numerous studies lauding the health benefits of nuts, Mr. Tankersley said.

The Nov. 21 issue of The New England Journal of Medicine cited a study from the Harvard School of Public Health and Brigham and Women’s Hospital University that found people who ate nuts seven or more times per week had a 20% lower death rate than those who did not eat nuts. The studies involved nearly 120,000 men and women over 24- and 30-year periods. The study indicated nutrients contained in nuts, such as unsaturated fatty acids, protein, fiber, vitamins, minerals and phytochemicals may confer cardio-protective, anti-carcinogenic, anti-inflammatory and antioxidant properties. The study was funded by the National Institutes of Health and the International Tree Nut Council, but funders had no role in the study, according to the Journal.

The Capital Press noted that the American Heart Association certified walnuts as heart-healthy in 2011 and a 2012 University of California-Los Angeles study suggested a steady diet of walnuts may boost male fertility. Numerous studies cited almonds, walnuts and several other nuts as providing benefits related to diabetes, prostate, heart, obesity and other health issues.

Almonds account for about a third of the global tree nut market, followed by cashews at about 20%, walnuts between 15% and 20% and hazelnuts and pistachios between 10% and 15% each. Pecans, macadamias, Brazil and pine nuts make up less than 10% combined. U.S. almond, walnut and pistachio crops are focused in California and hazelnuts in Oregon.