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Growers
February 1, 2010

Dear Walnut Grower,

We are pleased to introduce Atlas Walnuts LLC, one of California’s newest and oldest walnut processors. Most of you know us as Blain Farms, a family owned company in Tulare County that has been processing walnuts and pecans for almost 30 years. We have separated our walnut and pecan shelling operations and brought in some partners to help with the expansion of the walnut side of our company. We have retrofitted our shelling plant in Visalia with state-of-the-art equipment capable of handling additional tonnage and are encouraging growers to join with us in marketing and selling their walnuts.

We have a unique method of marketing walnuts that has evolved from our experience as both a grower and processor. We have always preferred to take the market risk and benefits as a grower, rather than see a portion of our crop value wasted due to speculation on future prices. Processors must always allow for future market fluctuations when they purchase walnuts from a grower for resale at a later date. As a result, the price growers receive is usually discounted to some degree from actual market prices, and some years that discount amounts to a substantial amount of money. In past years, the price of walnuts has increased as much as $1.00 per kernel pound (approx. $.50 per inshell lb.) after growers were paid, yet very little of that price increase was passed on to growers. Conversely, some years, processors take a loss when the price drops after paying the growers. That usually results in discounting grower prices even more the next year to make up for their losses. It was this type of situation that motivated us to start processing our own crop 30 years ago.

Atlas Walnuts is offering growers a marketing pool as an alternative to selling their walnuts on the typical consignment basis now being offered by many handlers. Over the last 30 years, our pools for walnuts and pecans have shown that growers receive the highest possible price for our crop when we, as growers, take the market risks and benefits that result from price fluctuations.

Our pools are completely transparent, allowing growers to see how the price they receive is determined. A pool is simply a group of growers who pool (combine) their nuts to take advantage of the economics of scale. Atlas Walnuts doesn’t purchase walnuts from growers at speculative prices.

It works like this: Clean, dry walnuts are received at our shelling plant, weighed and graded by DFA to determine the amount and quality of edible kernels delivered. Atlas Walnuts then provides all the required services to the pool, including processing, packaging, cold storage, marketing, and sales. The amount charged to the pool for these services is a fixed service charge, set prior to each crop year and agreed to ahead of time between Atlas Walnut and Growers in the pool. Atlas Walnuts pays all expenses out of its own pocket and when the walnuts are sold, Atlas deducts the service charges and then all of the remaining income is distributed back to the growers in the pool. Atlas makes its profit by efficiently processing and marketing the nuts for less than the agreed service charge, not by speculating on what the sales price might be.

We have been operating marketing pools for pecans and processing walnuts for nearly 30 years, so growers benefit from our long term customer base and years of experience in marketing pecans and walnuts to customers worldwide. Our payment schedule is based on sales, but we usually distribute approximately 50% in December, and the balance January through May.

We would enjoy giving you a tour of our facility if you have time to drop by. We are located on the corner of Ben Maddox and Caldwell Avenue in Visalia. If you have any questions or would like to receive a copy of our marketing agreement, please give us a call.

Sincerely,

Barrett Blain, Vice President Purchasing & Grower Services | cell: 559-804-5687
Brody Blain, CEO
Brian Blain, President
Lloyd Pace, CFO

 
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