By Hayley Boriss, Henrich Burnke and Marcia Kreith, Agricultural Issues Center, University of California.

Revised January 2012 by Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.


Overview
Two major varieties of walnuts are grown in the United States—the English walnut and the black walnut. The English walnut originated in Iran, and the black walnut is native to the United States. The commercially produced varieties are nearly all hybrids of the English walnut. The Northern California black walnut is primarily used as the rootstock for English walnut cultivars.

California produces 99 percent of the nation’s commercial English walnuts with almost all production taking place in the Sacramento and San Joaquin valleys.

Marketing
Walnuts are typically sold as a snack item or for use as an ingredient in candies, cereals and baked goods. Roughly 65 percent of walnuts are sold as shelled (NASS 2011). Diamond Foods, a former cooperative that went public in 2005, is one of the largest U.S. processors of walnuts (ERS 2005).

The California walnut industry is made up of more than 4,000 walnut growers and about 80 walnut processors. Two main organizations oversee industry advertising efforts and regulation—the Walnut Marketing Board, established by a Federal Marketing Order for walnuts in 1948, and the California Walnut Commission, established through the California State Legislature in 1987. The Walnut Marketing Board is responsible for the U.S. quality control regulation, which mandates that all walnuts be inspected and certified as meeting strict USDA specifications. The Walnut Marketing Board also provides industry analysis and general domestic marketing services. The California Walnut Commission is primarily responsible for international market development.

Consumption
Prior to 1993, per capita consumption of walnuts remained relatively stable at about 0.5 pounds per capita. In 1993, consumption fell to under 0.4 pound per capita, and after increasing in 1994, fell again in the two succeeding years. However, since the low in 1996 of 0.3 pound, per capita consumption of walnuts has been on the rise. In 2009 per capita consumption of all walnuts was 0.55 pound.

Industry-supported research found that walnut consumption provides health benefits because it is a good source of omega-3 fatty acids, vitamin E and other antioxidants associated with a healthy heart and a potential reduction of cancer cell growth (ERS 2005). The publicity surrounding these results has helped stimulate walnut demand. In addition, a 2005 report by the USDA’s Economic Research Service (ERS) suggests that the increased consumption in 2004 was due in part to the introduction of McDonald’s fruit and walnut salad, which had an impact on consumption both directly, by increasing sales, and indirectly, by reminding consumers of alternative uses of walnuts.

Supply
While the United States is a leading exporter of walnuts, China is the leading producer. The majority of China’s production is consumed domestically, but a limited amount of Chinese production meets the international standards for quality (ERS 2005). The United States ranks as the second largest producer in the world, followed by Turkey and  the Ukraine (FAO).

Production
The United States produced 503,000 tons of walnuts in 2010, up 15 percent from 2009. The U.S. value of walnut production that year totaled $1.1 billion. According to the 2008 Organic Production Survey (NASS 2010), the United States had 199 farms certified for organic English walnut production. Those farms produced 4,391 tons of nuts valued at $11.1 million.

Production of walnuts has oscillated over the last two decades but has also followed an increasing trend. Much of the variability in production is due to the alternate bearing nature of walnut trees. Similarly, yields per acre have also been variable over the years and also have shown more significant increases in the last decade. Walnut yields have generally increased from about 1.2 tons per acre in the early 1980s to 2.2 tons per acre in 2010.

The average size walnut farm in California is 46 acres, and most orchards are family owned or individually held farms (ERS 2005). Bearing acreage of walnuts remained relatively stable from 1980 into the early 1990s. Acreage increases were noticeable after 1993, when each subsequent year acreage remained either at present levels or increased. In 2010, bearing acreage reached 227,000 acres, up from 178,000 in 1992.

Prices
On a shelled basis, walnut prices have decreased since the early 1980 prices of almost $2.50 per pound. Prices varied in the late 1980s and 1990s between $1.50 and $2 per pound, but in 1999 prices fell to a low of $1.08 per pound. Since 1999, prices increased minimally, remaining below $1.50 for the first 5 years of the new millennium. Also since 1999, prices for walnuts have been less variable, a trend ERS attributes to continued strong demand both domestically and abroad (2005). In 2010, the season average grower price jumped to $2,110 per ton (NASS 2011).

Exports
The United States is the world’s largest exporter of walnuts. In 2010, the United States exported in-shell walnuts valued at nearly $358.5 million. Top destinations were Hong Kong and Turkey. The U.S. exported $460.9 million of no-shell walnuts. Top buyers were Japan, South Korea and Germany. Of the U.S. walnut crop, about 80 percent of the in-shell walnuts and two-thirds of the shelled walnuts are exported.
 
The United States is a net exporter of walnuts, with U.S. imports of walnuts negligible in comparison. In 2010, the United States imported in-shell walnuts valued at $4.7 million and no-shell walnuts valued at $19,000.

 
Sources
Fact Sheet, California Walnut Industry.

Fruit and Tree Nuts Outlook and Yearbook, Economic Research Service (ERS), USDA. 

Global Agricultural Trade System, Foreign Agricultural Service (FAS), USDA.

Noncitrus Fruits and Nuts, National Agricultural Statistical Service (NASS), USDA.

Statistical Database-Agriculture, Food and Agricultural Organization (FAO), United Nations.

2008 Organic Production Survey, NASS, USDA, 2010.

The U.S. and World Situation: Walnuts, FAS, USDA - Report listed under commodity presentations. This series of graphs provides information on imports and exports of in-shell and shelled walnuts.

Tree Nuts: World Markets & Trade, FAS, USDA.

U.S. per capita food availability, ERS, USDA, 2008.

Walnuts: Second Biggest Nut Crop Produced in the United States, Fruit and Tree Nuts Outlook, ERS, USDA, 2005.

Created March 2006 and revised January 2012.