When I was growing up in California’s Central Valley in the 1960s and 70s, walnuts ruled the landscape and economic bottom line when it came to tree nut crops.
Americans also ate more walnuts than they did either almonds or pistachios.
Almonds were secondary in both acres planted in California and in national consumption, and pistachios were almost non-existent.
But as is almost always the case in life, farming and business — things changed.
In the 1980s and 90s, almond orchards started bursting out all over in the Central Valley and elsewhere in Northern California, often replacing walnut orchards.
And then it happened – in the early 2000s almonds surpassed walnuts in California as the state’s most valuable tree nut crop. By 2002, almonds had overtaken walnuts in both total acreage and in production value, and they’ve continued to dominate the state’s tree nut industry ever since.
Almond trees became so ubiquitous in the Central Valley and elsewhere in Northern California that they altered the farming landscape, both physically and narratively.
Meanwhile, pistachio nut acreage grew only slightly in the 1980s and 90s, and remained a distant third place to almonds and walnuts in California.
During the same period, pistachios had yet to catch on as the mainstream snack nut they’ve become today. In fact, much of the pistachios consumed then in the U.S. were imported from places like Turkey and Iran. California wasn’t even a major player in global pistachio nut production, like it is today.
But speaking of the inevitability of change – in the case of pistachio nuts, the change in production and growth has been dramatic.
In the late 1980s to the mid-1990s the total annual dollar value of the California pistachio crop was around $230 million.
Today, the market value for California pistachios is about $1.86 billion, according to data from the California Department of Agriculture. It’s the state’s 7th largest crop by dollar value (almonds come in 4th; walnuts no longer rank as one of the state’s top 10 crops).
California is today responsible for about 99 percent of the U.S. pistachio production. The 2023 yield came in at about 1.36 billion pounds.
In terms of the state’s “Big 3” tree nut crops, California currently has about 1.56 million acres in almonds. Walnut acreage is about 420,000 acres, with 385,000 acres bearing and 35,000 acres non-bearing. Total pistachio acreage in California presently sits at about 454,000 acres.
It’s been a difficult few years for almond and walnut producers in California. Orchard operating costs have increased, while the wholesale prices that growers receive for their crops have plummeted. Prices for almonds and walnuts remain below breakeven.
Pistachios, the state’s third major nut crop, has fared better than almonds and walnuts have but a large 2023-24 crop put a dent in profitability. Unlike the two other major nut crops though, the price for pistachios remains above breakeven.
Things are looking up for the 2024-25 season though, in my research and analysis. For example, a new report from RaboResearch Food & Agribusiness for North America says there are bright spots in 2024 for pistachios, almonds and walnuts. Overall inventories are down, which means the amount of crop held over from the 2023-24 season will be less than in past seasons.
These multi-year lows for all three tree nuts means the industry has moved a significant amount of product this marketing year so far. This is potentially good news because it means there’s less of a past-season crop to move and more room for the 2024-25 crop, which is coming on.
The California pistachio industry has the least to worry about. Of the three major nut crops, domestic consumer demand is growing the fastest for pistachios and there’s a lot of room for exports.
The California almond industry is in a transition period and has a bigger challenge growing demand and sales going forward, but its status as California’s top tree nut crop and 4th-largest overall crop in market value should remain solid for years to come. The almond industry is addressing a myriad of issues in a positive way (see the related story in this issue of My Job Depends on Ag magazine), which bodes well for almond growers and the industry as a whole.
What the state’s almond industry needs to do is to lean-in on what’s gotten it from its infancy in California to its current status as a mega-crop and industry, which is to double-down on promoting almonds as a snack food, work with the food processing industry to create additional food and beverage products that feature almonds as a key ingredient, and expand exports of both the nuts and value-added products, such as almond milk and almond butter, made from California almonds.
The most troubled of the three big California nut crops is walnuts.
Things are beginning to turn around slightly for walnuts, but in order to rescue the crop, demand for California walnuts both domestically and globally has to be increased substantially. This is a must not only as a way to grow the industry but also because growers need much better prices for their walnuts in order to continue growing them. Today, the incentive to replace walnut acreage with other crops is high because most growers are losing money on their walnut crops.
Unlike almonds and pistachios, walnuts suffer both in the U.S. and globally from not being a regular snacking nut. Snack foods of all types, including almonds and pistachios, benefit from being frequent consumption foods. People purchase and eat them at a high frequency.
Walnuts though are still primarily used by consumers as an ingredient, mostly for baking and to a lesser degree in food dishes. A very low percentage of consumers snack regularly on walnuts, in contrast to almonds and pistachios, which have become mainstream high-consumption, high-purchase snack foods.
The walnut industry needs to address this and put a major emphasis on positioning walnuts as a snack food as well as a nut to be used as an ingredient.
Snack food companies also need to create more interesting and convenient snack food products using walnuts like they’ve done with almonds and pistachios. This not only will help to better position walnuts as a snack food but it will also increase sales of California walnuts.
The walnut industry also needs to take a page from the almond industry playbook and better advance the use of walnuts by food companies to create food and beverage products. For example, none of the major almond milk or almond butter brands have created comparable walnut milk and almond butter brands and backed them with massive marketing budgets like they’ve done with their almond-based products.
Walnuts are one of the healthiest – particularly heart-healthy – crops grown, and there’s a huge opportunity for the food industry to do with walnuts what it’s done with almonds, which is to create walnut-centered food and beverage products, along with using walnuts as an
key ingredient in a wide-variety of food products.
The walnut industry itself can do a better job of marketing the amazing health and wellness benefits of walnuts.
From a farming standpoint, unless demand for California walnuts increases significantly over the next few years, I expect to see a 15-25 percent reduction in acreage in California over the next 5 years.
In contrast, almond acreage should remain about flat or decrease only slightly.
Conversely, I expect to see a significant growth in total pistachio nut acreage in California over the next few years. A recent report commissioned by the American Pistachio Growers trade association estimates California pistachio acreage could top 811,000 acres, with production reaching 2.08 billion pounds by 2031. That would be a near-doubling of the current estimated 453,750 bearing acres.
I think the estimate might be a bit high for the time-frame but since California grows 99% of the pistachio nuts in the U.S., and the U.S is now the world’s-largest producer of pistachios, it’s very possible this will be achieved.
The success that is the dynamic and changing California tree nut industry is one of the agricultural wonders of the world. California is the leading producer of almonds and pistachios in the world and the second-largest producer of walnuts, after China.
The change in the overall popularity of the major nut crops grown in the state is also fascinating, as almonds replaced walnuts as the top nut, with pistachios now closing in on almonds for that honor.
Most important though is that growers of all three crops need better prices for their nuts in order to continue growing them. Achieving that requires increasing consumer and food industry demand, while also growing acreage at a reasonable rate because building and increasing consumer demand for crops like tree nuts generally takes longer than it takes to increase supply.
My Job Depends on Ag Magazine columnist and contributing editor Victor Martino is an agrifood industry consultant, entrepreneur and writer. One of his passions and current projects is working with farmers who want to develop their own branded food products. You can contact him at: victormartino415@gmail.com.
