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  • Writer's pictureMurat Badem

Nisão Walnut Production Blog: Ep. 1 - Walnut business in a nut shell

Updated: Nov 30, 2023

A - Basic Principles & Disciplines:

Presenting Views on Walnut business and best practices
Walnut business in a nut shell

In writing this blog, I rely on certain assumptions, which may or may not apply to your case. If they do not, you should simply save time by stopping to read it. If they do, please keep in mind that my opinions are based on my observations and assessments formed during my countless travels, meetings, readings, seminar attendances, discussions with other growers and other walnut professionals, within the last fifteen years that have almost entirely been dedicated in this business. Although I do not claim to be an expert in the field, I wanted to share my views on various aspects of this business, hoping that this will provide the readers some insights.


Assumption 1: Your approach to Walnut production is professional, meaning predominantly to achieve financial profits. This is not to mean that you can not also possess noble causes, like being closer to the nature, nor doing so should be in contradiction to achieving such financial goals. Yet, whatever secondary motivations you may have, your primary goal is to make financial profits.


Assumption 2: You have desire and enough resources (time, money, energy, patience potential to learn ) to establish and maintain a certain minimum size of plantation, as below this "certain size", it is unlikely to fulfil your initial goal. Although each situation should be evaluated within its own context and I always refrain from giving simple answers, for practical purposes, we can consider this minimum to be about 30 Ha (30,000 square meters), enough area to fully utilise one set of mechanical resources and manpower; i.e. one decent tractor and an operator. Any factor of this, i.e. 60, 90, 120, 150 Ha, up to a certain saturation level, will give you economies of scale by allocating many fixed cost items to a larger area.


Walnut production is a business, not too different than many other businesses, like hotel management, construction or textile manufacturing. The same is also valid for almost all types of agricultural activities. It involves obtaining a clear understanding of the key elements and making countless decisions, choices among options, controlling resources, activities, observing results year after year. Some businesses are more transactional, where results are shaped by short term decisions and actions, while some others are more strategic, where a series of actions and decisions in the long term determines the outcome. Walnut production is for sure in the second category. BUT, make no mistake, every action you make, although non visible immediately, will have an effect on the final outcome.


My experience with walnut began with no previous knowledge about soil, water, electricity and chemistry. Not having an engineering degree, many of these key concepts took me much longer to learn than others. I, on the other side, had a few advantages:

  • My lack of knowledge in basic engineering concepts, has forced me to spend more time to learn them, by heart. In fact, I have seen many overconfident people with more relevant education failing to take many key concepts as seriously and making unrecoverable mistakes.

  • My analytical, curious character supported me to question each information component required to be taken into account for important decisions.

  • I learned the importance of planning and well establishment before I began planting. It is much easier to be a perfectionist in preparation than in execution.

These factors helped me to achieve, perhaps unconsciously, my Number One Rule of the Walnut Production that I have shared in my countless discussions with my fellow walnut growers: Walnut production is an "unforgiving" business ! As one of our instructors at UC Davis, attending a workshop entitled Advances in Walnut Production has said; "in walnut production, your sins (mistakes) are never forgiven." Therefore, you must do your absolute best to make as few Tactical Mistakes as possible, and avoid making Strategic Mistakes at all costs. Tactical mistakes are things that will cause loss of time or compromised results in a particular period, but could be recovered from. Strategic Mistakes, are poor decisions or performances in key areas; like choice of location, variety, rootstock or assessment on water requirement. Recovering from them is usually impossible or extremely costly. Any important decision must be given after having a good understanding about the underlying facts and their potantial outcomes. Do not rush take chances. Try to accumulate reliable sources of information, an experienced grower perhaps, to discuss the concepts to get a better understanding before making these important decisions. Sometimes waiting for an extra year to make the better decision will help you save years or an entire project's future.


An other important lesson I have learned in walnut production is the importance of being humble. I have seen many walnut investors starting the business with no agricultural background, simply pushing to enlarge their plantation size, even before seeing how their operation is going. My recommendation is to have a master plan with stages, each stage having a plantation size and a duration of about 2 years, at least initially, which later on can be revised to one. You will see that by observing the outcomes of your preparation and management, you will begin to improve yourself in each step, not repeating the mistakes you have initially made. Again, as you do a better job, the time lost between these stages will be easily made up with improved results.


Like every business, Walnut Plantation requires other sets of skills like financial management. Do not forget, it is a marathon, not a 100 m race. Do not make, believe in or rely on optimistic plans. Things will most likely happen that will delay your cash flow generation. Have and preserve buffers of funds that will bridge your gaps. As motivated as you are in spending them on new plantation plots, curb yourself. I have seen far too many failed projects that have gone bust. The important thing is to be in line with your projections, and to preserve the breath that will take you there.


Always check and re-check your projections, on costs, productivity and sales price. Talk to others and compare your scenarios with theirs. Do not be ashamed to ask underlying assumptions, learn from others mistakes and take continuous steps in building a more reliable financial plan. This is a never-ending process.


Keep in mind that in a long project like walnut production, there may be several changes in your trade environment that are entirely beyond your control. Import restrictions, currency exchange rate fluctuations, customs duty rates... They all may have major effects on how your assumptions will realise.


Finally, always keep in mind that agriculture is not an activity simply carried out by villagers, but it is a business, one that could be very profitable, if and when done right as a primary business activity.


Oct. 2, 2022

Lisbon

Next: Ep. 2 - Big Decisions 1 - Land, Climate, Soil, Water

 

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