Low producer prices coupled with a weakening U.S. Dollar are making tree nut exports more attractive to global customers in an age of record-size crops.

A CoBank report says economic factors are aiding growers right now, though clouds of uncertainty remain as shipping container availability for U.S. agricultural exports has fallen to near-zero through alleged unfair and illegal practices by maritime shipping companies. CoBank estimates that 10-20% of U.S. tree nut exports were delayed by the lack of available shipping containers.

All three major California commodities -- almonds, walnuts and pistachios -- hit record production levels last year as almonds and pistachios crossed milestone levels. Almond growers harvested over 3 billion pounds while pistachio growers crossed the billion-pound threshold for the first time. Walnut growers harvested a 1.7-billion-pound crop in 2020, according to the report.

Walnuts were said to suffer quality issues as summer heat darkened kernels and increased losses to shriveling. The shorter shelf life of walnuts due to their high oil content raised the urgency to sell the record crop, writes Tanner Ehmke, CoBank lead economist for specialty crops, in the report.

Almonds too suffered, but for different reasons. Limited processing infrastructure to handle the record crop, coupled with an increase of high-moisture nuts, brought challenges to processors, the report continues. These moisture levels are of particular concern for the condensation and fungal growth that can raise food safety concerns among stockpiled almonds.

Exports

CoBank's report says that California almond exports through February were up 20 percent in nearly all regions of the world. Western Europe is said to be the largest export destination for U.S. almonds, saw increased exports of 8% year-over-year, while exports to China and India were up 50% year-over-year. This, despite retaliatory tariffs in both countries that raised issues with exporters.

Walnuts too were up nearly 25% year-over-year for shelled and in-shell combined. Turkey, the top destination for in-shell walnuts, imported 24% more walnuts, year-over-year. India, the next-largest market for U.S. walnuts, imported 129% more nuts year-over-year.

Pistachio exports were up 16% year-over-year, according to the report, with China and Europe each taking over one-third more pistachios than they did the previous year.

All this growth and the need to harvest tree nuts in a relatively short window of time – generally from early August through about October – has stressed harvest crews, hulling and shelling capacity and processing capabilities. Others outside of the CoBank report have pointed to similar

challenges in states like Arizona and New Mexico as California growers and investors are being chased to Arizona on promises of fewer regulatory burdens and cheaper land.

Ehmke predicts that subdued nut prices, particularly for walnuts and almonds, may persist through the next marketing year. Projections of a relatively flat price for pistachios remains as the alternate bearing nature of that crop tempers production somewhat. Pistachio production coming off an "on-year" can fall one-fourth to one-third from the previous year, but as more bearing acres come online, overall production going into future off-years will be tempered somewhat by new bearing acreage.