PRESENTATION HARVEST 2021-2022

2021-2022 HARVEST

ORIGIN OF THE WALNUT IN MEXICO

The pecan walnut is native to the southeastern United States of America and northern Mexico (Gray, 1973). The first commercial plantations began in 1871, and the pioneering introduction of commercial plantations in Mexico was made in 1904, in the state of Nuevo León.

The Northern States of Mexico are the main producers of pecan nuts in Mexico, the “Comarca Lagunera” (land of Coahuila), the state of Chihuahua, the state of Sonora together with the southern states of the USA, represent more than 91% of the production in the world.

In the photo, the missing walnut tree "The Musician", who was 300 years old when he died, and which had to be surrounded by 10 people to cover it.

Valle de Allende, Chihuahua, México.

NINE BENEFITS

OF PECAN NUTS THAT WILL SURPRISE YOU

Pecans are a Good source of nutriments and energy, they can be used as snacks, condiments or ingredients.

HERE ARE SOME FACTS YOU SHOULD KNOW ABOUT THESE NUTS.

28 GRAMS OF THEM PROVIDE:

200 calories

3 grams of fiber

3 grams of protein

20 grams of unsaturated fats

Making them a healthy and satisfying snack with a significant load of antioxidants, vitamins and minerals.

THEY HAVE A GREAT AND POSITIVE INFLUENCE ON OUR IMMUNE SYSTEM

Pecans provide phytonutrients (plant compounds with powerful antioxidant benefits). They are also a good source of the mineral zinc which is crucial for white blood cell development and it’s function.

Diets high in zinc are associated with a lower risk of different diseases, particularly those related to age and lifestyle. Also, food that contain ellagic acid (an antioxidant found in pecans) is associated with a reduced risk of some cancers.

THEY ARE LOW-SUGAR

Not only they are low-sugar, they also improves blood sugar levels by slowing the absorption of sugar from the bloodstream by peripheral tissues. Helping to maintain good energy levels and prevent blood sugar spikes.

BRAIN BOOSTERS

Nuts can be helpful on diets high in vitamin E which are linked to decreased risk of disease Alzheimer’s and dementia by up to 25%.

Vitamin E and other antioxidants found in plant foods help reduce oxidative stress caused by inflammation, protecting cells and tissues of vital organs such as the brain.

THEY ARE CRUCIAL FOR HEART’S HEALTH

Pecans are full of monounsaturated fatty acids (a type of fat that improves cholesterol levels in the body).

They‘re packed with betacarotene and vitamin E that reduce the effects of some chronic inflammations.

HIGH IN FLAVONOIDS

According to the USDA, pecans are full of flavonoids (a type of antioxidant found mainly in fruits and vegetables) than any other type of nut. Those who consume foods high in flavonoids are unlikely to develop chronic diseases.

In addition, a study conducted in 2016 found a possible connection between flavonoids and weight control.

THEY CAN SATISFY A CRAVING FOR SALTY SNACKS HELP CONTROL WEIGHT 2 3 4

Nuts are high in fat. However, the type of fat found in tree nuts can promote weight loss and control, because nuts are a source of oleic acid (a fatty acid that creates satiety while promoting heart health).

Pecans are an excellent source of manganese and copper, two minerals that support overall metabolic health, contain antiinflammatory properties, and can potentially reduce heart conditions. Those nutrients have shown specific qualities in preventing high blood pressure.

Nuts are naturally a sodium-free food, ideal for anyone on a lowsodium diet. Diets high in sodium are linked to an increased risk of chronic diseases.

Incorporating pecans into any recipe can help retain great flavor and add powerful health benefits.

PRODUCTIVE LIFE IN A PECAN WALNUT TREE

The productive life of a walnut tree begins at 6 years of life, in which from the 10 th years of it, starts its optimal production levels until reaching 50 years of age.

According to the technical maintenance management and especially its pruning, we can reach a productive life of more than 100 years old, commonly grows in sandy clay soils with good drainage.

Actually, it’s profitable age according to the world market, starts from the 14th age in plantations at medium-low densities (which means 60-80 trees per hectare).

There are new plantations which can handle up to 220 walnut trees per hectare (high density). Reaching their optimal production 8 years after being planted.

This has a higher difficulty and cost for their management, decreasing their profitability in the upcoming years.

Low Density planted Walnut Trees

High Density planted Walnut Trees

COMMERCIALIZATION, MARKET AND PROJECTION

Since 2019, Mexico became the number one producer in the world, reaching an approximate figure of 110,000 tons in shell nuts.

Leaving the United States in second place, this is due to the fact that plantations in Mexico increase by 8% each year and in the United States, due to its laws and regulations, it is not so easy to start new plantations. Mexico is a slightly more accessible country for that, the labor is cheaper, the costs of fertilizers, land management, etc.

That’s why it’s a profitable business in Mexico and the two countries share a very similar climate in northern Mexico and southern U.S.A.

This great new fruit has conquered new markets, especially in Asia and Europe. Therefore, increasing its demand each year by 10%, which causes a deficit in the amount of walnut produced, and the new farms that go into production against the demand that increases in a unbalanced way. This generates a price increase, which has meant a great business for the largest marketers in the U.S.A that with their great financial infrastructure manage to monopolize the nut at low prices.

Since 2016, when record price figures were achieved (walnuts in the shell of $ 8 USD per kilogram approximately), walnut hoarders and large importing buyers from the USA managed to control the market by pressuring farm owners to sell their merchandise, simulating low demand and low supply after they broke them. To later sell it to the Asian and European markets, mainly at high costs throughout the year.

This year, around 30% less production is expected due to climate and drought issues in Mexico and the U.S.A., which will have a great impact on the markets

HARVEST 2021-2022

The harvest of the year 2020 was a record harvest with more than 120,000 tons. Due to the high temperatures registered in the last months of the year, they achieved a catastrophe called viviparity (the ripe walnut combined with heat and humidity causes the walnut, which is a seed to germinate, causing a change in it, making its taste bitter. and changing its properties). Most of the walnut farms lost around 25% of their walnut due to this catastrophe by lowering their qualities and obtaining a low price for them.

This 25% of sprouted nuts are processed in a different way, taking them to a crushing process and thus disguise their flavor and color to be able to find a market within Mexico at a very low price.

Which, as a consequence, causes the walnuts in halves to increase in value and the walnuts in a single piece are priced much better. But the stock of 2020 and 2021 was not enough to meet the needs of European and Asian markets, leaving the warehouses of the large hoarders empty at the end of 2021.

Mexico is forecast to have lost 30% of its crop this year. Compared to 2020, due to the high temperatures and drought that has reached the north of the country, although of very good quality compared to last year.

What has caused the start of the price in 2021 to be with a high price, everything will depend on the production that the Mexican and U.S. farms have. This will be known until the walnuts are in the storage of each farm, everything seems to indicate that it would be pointed on the increasing price, it will start at a high price but this will increase significantly as the harvest days pass.

ESTIMATED PRICES AND FUTURE MARKETS

Since the 2000s, the pecan nut has become known all over the world, conquering markets where it was totally unknown, being called the new Super food. This has generated an accelerated increase in demand; Something unsustainable for its supply, because the trees do not offer us immediate production. Farmers were doubtful to invest in those trees in the early 2000s, but in 2010-2011 many appreciable Mexican entrepreneurs began investing in turning their livestock or forage farms into walnut farms.

Every year new walnut farms starts producing, but it’s not enough to satisfy each demand. Every year more people invest in new plantations, but it will not be until 10 years later, it begins to give results.

The market grows linearly, the farms also do it, but in less volume.

Let's add to this that walnut trees have a great peculiarity, they are alternating trees. Which means: One year they produce a lot of fruit and the next year they rest and produce little amount of fruit.

In the stage of quick fruit development (which happens when high temperatures reach the ground and in the middle of summer) the tree works quickly to fill its fruits, at the same time it’s forming flower buds for the next cycle (buds that will be the flowers of our next cycle).

If the tree has a lot of nuts in the current year, it will neglect the buds of the following year a bit. Instead, if it has few nuts, it will pay more attention to forming its yolks, generating an inevitable alternation. Of course, with better technical management of the walnut farm we can reduce this alternation and almost come close to disappearing it, situation that could affect us nowadays. In previous years we lived a severe drought, that’s why the trees are stressed, they have released many of their nuts in mid-summer, reason why the 2021th harvest is a bit weak this year and we are noticing it in the Sonora Area, where they have begun to harvest and the prices today are high.

WORLDWIDE CONSUMPTION - NATIONAL WALNUT PRODUCTION

MARKET FOR WALNUT HALVES AND CRUSHED

The crushed walnut market has become very profitable for many breakers in recent years. They have found a good way to disguise all those sprouted nuts by crushing them and in this way process them in electronic eyes to clean the nuts, removing blackheads, and walnut imperfections. All of these nuts are purchased from farms at very low costs, which has created strong competition in the national retail markets to sell these nuts.

There are different sizes, the smaller the cheaper its price.

Consequently, whole walnuts in complete halves increase their price. Since it is the only way to guarantee that the nuts are not sprouted or were bought as waste.

WALNUT HEARTS

The market for walnut kernels is a market with high demand and at a high price. The stock that the world breakers have of this product is what will mark the price of field nuts.

On this 2021 harvest have been heard that the warehouses of American buyers are very empty. Thousands of hectares were not irrigated due to lack of water, the price of walnut halves is on the rise and this price can be exponential. Many buyers have commitments that they must fulfill and there is not enough nut to satisfy them.

We have a drop in production, consequently, an increase in the quality of the walnuts. The trees filled their nuts better but in less quantity. This year we will have little quantity of sprouted nuts, consequently, few pieces and many halves.

LARGE SCRAP

HALF HEARTS SMALL SCRAP

GRAIN

QUALITY

There are different methods to evaluate the quality of a walnut or a batch of walnuts, the best known are by number of pieces, kilo or pound. The other is calculating the amount of walnut kernel with respect to the total weight of the piece in percentage.

In the European and Asian market the quantity of walnuts per kilogram is more important. This is, because for them the size of the pieces is more valuable than the flavor or the concentration of oils.

On the other hand, in the Mexican or US market, the percentage of walnut is based on their total weight.

Their prices vary on this, for example: How to obtain the quality and price per point.

Our buyer will show us a tab similar to this:

Let’s pretend we take a sample of walnut in shell and by removing all the fruit we obtain: 300g

Total sample 300g.

Fruit weight 177g. Shell weight 123g.

177 / 300 = 0.59% Quality

Quality = 59 %

We took the price of $5 USD per point

x(1000). = 11.01 x( % .59)= $6.49 5

Evaluated lot price

454 - pound