Branching Out Into Walnuts

January 23, 2014 07:01 PM
Branching Out Into Walnuts

This article is in conjunction with the Dairy Today article "California Goes Nuts" in the February 2014 issue.

About 15 miles north of Melvin Simoes’ farm, Tipton dairy producer John Mendonca is two years into an expansion into walnut production. His dairy milks 600 cows and is home to 500 head of support stock.

Over the past few years, Mendonca’s ground for growing corn, alfalfa and winter wheat shrank from 900 to 500 acres as he watched his rental ground get sold. Most of the acreage was purchased by investors seeking land for almonds, walnuts or pistachios. The decreased acreage forced Mendonca from being a self-sufficient feed grower into having to buy almost half of his alfalfa hay needs.

Mendonca BMR corn 4 13 096   Copy

Now in his second year of diversifying into walnuts, John Mendonca of Tipton, Calif., has only one regret. "I should have done this five years sooner," he says.

"I had been planning on expanding the dairy, but with the low profit margin due to high input costs, I felt expansion would not be the best solution," Mendonca says. "After consulting with some close neighbors, they felt I would be a good candidate for a little diversity into some permanent crop. They showed me what the return on investment is like. The ground that my mom and I already own is ideal for walnuts."

California is home to 99% of the nation’s walnut production. More than 11,000 new walnut acres were planted in 2013, contributing to a crop that has nearly doubled in the last decade. The 2012 crop yielded a record average price of just over $1.52 cents per pound on finalized contracts.

Ready to diversify into walnuts, Mendonca had to decide how much land to take out of feed production for the new orchard. He consulted with his banker, weighing walnut costs and revenues, and compared them to the dairy’s feed loss. After calculating costs for converting to an 80-acre walnut orchard, his banker agreed to a development loan.

Mendonca’s walnut expansion costs reached $121,000. He did some work, like land laser-leveling and tree pruning, with family help. The single biggest expense was $93,000 for 6,000 grafted walnut trees.

"I have been planting winter oats in between the rows to help minimize the loss of feed from taking this field away from feed production," says Mendonca. "I have been able to produce around 200 tons of oat hay per year between the trees."

Mendonca will harvest his first walnut crop in the fall of 2017. He hopes to gross around 400 to 500 lb. per acre.

Now in his second year of diversifying into walnuts, Mendonca has only one regret. "I should have done this five years sooner," he says. "Walnut prices hit another all-time high in 2013. I don't know how long we will have these record-high prices, but it looks very promising for the near future."

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