What is in this article?:
- California walnut industry surges with record exports
- China increases imports
- The California walnut industry has experienced record growth in the last five years, breaking through the 500,000-ton barrier in 2010 to reach $1 billion in farm gate revenue.
- Exports account for 60 percent of shipments with strong demand from Asia, Europe and the Middle East.
Demand for California walnuts in markets around the world has raised walnuts to the fourth leading export from the state, valued at approximately $820 million. The industry has experienced record growth in the last five years, breaking through the 500,000-ton barrier in 2010 to reach $1 billion in farm gate revenue. Exports now account for 60 percent of shipments with strong demand from Asia, Europe and the Middle East.
Developing export demand is one of the responsibilities of the California Walnut Commission (CWC), established in 1987 through California state law AB 547 and a referendum of growers. The CWC began its early investment in markets that were not yet open to imports in the 1980’s. “The Market Access Program (MAP) was designed for agricultural commodity groups, such as the California Walnut Commission, to engage in promotional activities that encourage the development and expansion of export markets,” states USDA Foreign Agriculture Service (FAS) Horticultural Crops Branch Chief Kevin Sage-EL. “The MAP program has been critical to our industry’s export market development, funded key marketing activities to expand distribution, furthered product development and educated consumers to the many benefits California walnuts offer,” says Chuck Crain, Commission Member and President of Crain Walnut Shelling. Grant awards through MAP have contributed on average $4.5 million to partially fund the industry’s export development activities. These funds are matched by industry contributions.
In Europe, Germany has traditionally been a top destination for inshell walnuts. However, changing consumer preference has spurred the popularity of shelled walnuts which account for much of the growth seen in recent years. Shelled shipments to Germany increased 30 percent over the year prior. Overall, exports to Germany have reached a record high of 82 million pounds (ISE) during the most recent crop year, making Germany the walnut industry’s number two market.
South Korea, a closed market to the industry in the early 1990’s, was successfully opened in 1995 through bilateral negotiations. With the support of the MAP program, today South Korea imports 46 million pounds (ISE) from California, valued at nearly $70 million. The successful negotiation of the United States and South Korean Free Trade Agreement (KORUS) in 2007, ratified by Congress last fall, which will reduce tariffs on walnuts is expected to boost exports to this market. The shelled walnut duty will fall from 30 percent to zero over six years, with the first year’s reduction being immediate, effectively phasing out the duty in five years. The inshell duty will fall from 45 percent to zero over 15 years.