Tree Nuts

SIC 0173

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in the production of tree nuts, including almonds, filberts, macadamia nuts, pecans, pistachios, and walnuts.

Industry Snapshot

Nuts are high in unsaturated fat and low in saturated fat, and they are considered to be a high-energy food containing dietary fiber and essential vitamins and minerals. Most varieties are used throughout the year as nutritious snacks. Products containing nuts include ice cream, candy, assorted baked goods, and even, in the case of almonds, cosmetics.

The United States is a dominant world player in the commercial production of tree nuts, especially almonds, walnuts, pistachios, and pecans. According to the U.S. Department of Agriculture (USDA), there were 22,821 tree nut farms in the country in the late years of the first decade of the twenty-first century. The total crop value of tree nuts produced in the United States was almost $4 billion in 2009. By contrast, the value of the 2001 crop was only $1.5 billion.

California alone grows almost 90 percent of U.S. nut crops. In fact, nearly all almonds, pistachios, and walnuts are produced in California, with crops averaging more than 1.5 billion pounds in the early 2010s. About 75 percent of pecans, on the other hand, are grown in Georgia, New Mexico, and Texas. Smaller categories of nuts include hazelnuts, which are grown in Oregon, and macadamia nuts, which are grown in Hawaii. Production of hazelnuts more than tripled in the last two decades of the twentieth century, according to the USDA. The outlook for macadamia nuts was also good, as demand continued to exceed supply.

The pecan, the black walnut, and the butternut (white walnut) are native to the United States. Pecans grow in the central and southern United States. Native walnuts grow throughout the central Mississippi Valley and the Appalachian regions. Only the imported English or Persian walnut, grown in northern and central California and Oregon, is considered to be of commercial importance. At the beginning of the twenty-first century, per capita consumption of almonds, pecans, and pistachios was on the rise, while consumption of walnuts had declined.

In the first decade of the 2000s, almonds were the sixth largest U.S. food export and the largest food export for California. They were shipped to more than 90 foreign countries. Europe and Japan were the largest markets for almonds, while Canada and Germany were the largest markets for U.S. tree nuts in general. Because per capita consumption of almonds was less than one pound in 2003, U.S. almond growers exported about 75 percent of production. Exports to Europe received a boost with the passage of the General Agreement on Tariffs and Trade (GATT). Before its passage, almond shipments over 100,000 pounds incurred a 7 percent tax. A 2 percent tariff was imposed on shipments under 100,000. GATT doubled the allowable tonnage under the 2 percent limit and provided for a gradual decrease of the 7 percent tariff to 5.5 percent.

Tree Nut Production in America.
These nuts are grown in orchards using modern cultivation methods that include supplemental irrigation, fertilizers, and insect and disease control for maximum productivity. Harvesting is mechanized, with the exception of macadamia nut gathering, in which the nuts are shaken from the trees and transported to processing factories. There the hulls or shells are mechanically removed, and then they are electronically sorted and graded.

Background and Development

Government agencies have been instrumental in establishing the importance of tree nuts in the United States. Several important pieces of legislation have been implemented over the years, such as the almond marketing order that established the Almond Board of California in 1950 to stabilize the volatile almond market, and the creation of the California Pistachio Commission in 1981 to aid the development of the industry. In addition, the USDA has been instrumental in developing more productive varieties of pecans that have expanded the industry.

Though the consumption level dropped to a mere one-half pound per capita, the 1995 almond crop still brought in a USDA-estimated $1 billion. That same year California yielded 148 million pounds of pistachios from about 60,000 acres, a crop valued at about $141.6 million.

After jumping to an all-time high of $2 billion in 1997, the production value of tree nuts dropped back to $1.4 billion the following year. By the early years of the first decade of the 2000s, this had increased to $1.5 billion. Tree nut production early in the decade exceeded 2 billion pounds as both U.S. and international demand increased. Per capita consumption of tree nuts in the United States grew from 1.7 pounds in the late 1970s to 2.5 pounds in the early 2000s.

Due to increased production of pistachios, which reached a record 243 million pounds in 2000, the U.S. became the second largest grower of pistachios in the world in the early years of the first decade of the 2000s. Accounting for 20 percent of total pistachio production worldwide, the United States was second only to Iran, which accounted for 51 percent. U.S. pistachio growers exported roughly 44 percent of their crops annually. Leading export markets included Hong Kong, Belgium, Italy, and Germany. Although pistachio exports declined 35.3 percent to 6.3 million pounds in the 2002-3 growing season, U.S. per capita consumption, which grew to a record high of one-quarter pound in 2001, continued to increase.

Increased demand for higher quality pecans in the early years of the first decade of the 2000s fueled an increase in U.S. pecan imports. During the 2002-3 growing season, imports increased 31.2 percent, growing from 27.7 million pounds to 36.4 million pounds. Mexico continued to be the leading supplier of pecans to the United States. Georgia traditionally produced roughly 33 percent of all U.S. pecans; however, difficult weather conditions in 2002 pushed that figure down to 25 percent. Exports of pecans during the 2002-3 growing season declined 35.3 percent, falling from 9.8 million pounds to 6.3 million pounds. Per capita consumption of pecans averaged nearly one-half pound throughout the early years of the decade.

Current Conditions

U.S. production and consumption of tree nuts increased into the second decade of the twenty-first century. The USDA reported that per capita consumption of all tree nuts rose from 1.7 pounds in 1977 to more than 3.0 pounds (shelled basis) in the late years of the first decade of the 2000s. Part of the reason for the increase in consumption was U.S. consumers' increasing health-consciousness, as well as an increase in public awareness of the nutritional value of nuts.

According to the USDA, exports in all categories of tree nuts also increased in 2010. Almond exports grew 15 percent to 873.5 million pounds. Spain, Germany, and Hong Kong were the top export markets for U.S. shelled almonds. A majority of in-shell almond exports went to India (45 percent) and China (40 percent). The pistachio export market had more modest growth, up 10.5 percent to 78.2 million pounds, while U.S. walnut exports increased a whopping 43 percent to 188.9 million pounds. Pecan exports experienced the most dramatic increase of all, due to an exceptionally large U.S. crop, and were up almost 72 percent to 49.3 million pounds in 2010. Shelled pecans also experienced a dramatic increase in U.S. imports, rising almost 60 percent to 65.8 million pounds. A majority of these nuts came from Mexico. Imports of most other types of tree nuts were down: shelled pine nuts dropped 61 percent to 810,00 pounds; shelled Brazil nuts were down 38 percent to 2.8 million pounds; and shelled cashews dropped to 58.0 million pounds, a decrease of 3 percent.

Industry Leaders

Founded in 1910 as the California Almond Growers Exchange, Sacramento-based Blue Diamond Growers is the largest tree nut grower-owned cooperative with approximately 3,000 members. Blue Diamond's members produce one-third of California's almond crop. Annual sales in 2009 reached $709.3 million with 1,100 employees.

Diamond Foods Inc., of San Francisco, California, with 855 employees, produces a variety of nuts, including walnuts, which accounted for 47 percent of sales in 2009. Based in Hawaii and the world's largest macadamia producer, the privately owned ML Macadamia Orchards produced 21 million pounds of the nut annually and posted revenues of $16.4 million in 2009.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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