Walnuts are a popular ingredient for snacks, baking, and plant-based recipes, but if you’ve tried buying them recently, you might have noticed they cost a lot more than usual. The reason isn’t just seasonal. There is a global walnut shortage affecting buyers, sellers, and even restaurant owners everywhere. Whether you use walnuts in your products or stock shelves, it is vital to keep up with the factors behind this shortage and what you can do next.
What Drives the Walnut Shortage?
A handful of factors have come together to squeeze global walnut supply in 2023 and 2024. Below are the primary issues at play.
1. Declining US Production—Especially in California
The United States, and specifically California, has been the backbone of global walnut production for decades. Until recently, California contributed over half of the world’s walnut crop. Over the last two years, conditions have changed sharply.
Severe droughts, fluctuating rain patterns, and record-high temperatures in 2023 and 2024 have hit walnut orchards hard. In the span from September 2023 to August 2024, about 18,000 acres in California were removed from walnut production. Another 10,000 acres have been either severely stressed or completely abandoned, meaning these trees won’t yield any nuts for some time.
For growers, extreme weather means fewer nuts per tree and a lower quality harvest. If you run a bakery or food business, you’ll see the result as delayed orders, smaller shipments, and far higher wholesale costs.
2. Price Hikes Spurred by Supply Drops
With less supply, prices naturally surge. In the United States, the price of walnuts broke above $4 per pound for the first time since 2021. The cost of walnut kernels on global spot markets grew even faster, passing $5,000 per metric tonne.
For a quick comparison, just two years ago, walnut prices fell as low as 30 cents per pound. What’s changed is not only production levels but also strong demand from consumers and food makers worldwide. If your procurement budget is under stress, you are not alone. Almost everyone in the nut supply chain has tightened spending or looked for alternatives.
3. Low Inventories and Persistent Market Tightness
Another issue feeding the shortage is reduced inventory. Many suppliers sold off stocks during the last few high-shipment years, expecting a bounce-back in harvest. Instead, harvest fell, and new walnuts couldn’t fill the gap. This has emptied out grower and processor warehouses much faster than usual.
If you’re responsible for keeping your business supplied, keep in mind that “just-in-time” ordering may not work for walnuts in the next year. Today’s ending stocks are well below historical averages. Expect prices to stay high into late 2025 unless weather and acreage issues reverse.
Global Production Patterns: Chile, China, and the Changing Supply Picture
The walnut industry is not isolated to the US. Two other players—Chile and China—play major roles and offer some relief, though not enough to fully balance the market.
Chile’s Walnut Harvest Surges
One bright spot is Chile, where growers expect a 25% jump in production for 2025. This recovery comes after a tough period of weather-related setbacks. Chilean walnuts are generally smaller than California’s but can fill gaps in many recipes. If you’re open to buying from Chilean suppliers, be sure to clarify grade and shipment timelines upfront. Shifts in supply from Chile affect price negotiations globally.
China Stays Steady at the Top
China is actually the world’s largest walnut producer, with over 682,000 metric tons forecast for the season, or 55% of global supply. However, most Chinese walnuts stay in domestic markets, where demand is high. Depending on your purchasing channels, you may not see direct imports from China, but Chinese output does help stabilize the worldwide picture and prevents the shortage from growing worse.
The Pressures Squeezing US Walnut Growers
Behind every pound of walnuts is a farmer making tough choices. Growers in California have faced slim profit margins for several years. When the walnut price dropped to just thirty cents per pound in 2022, many growers lost money on every sale. Rising production costs for water, fertilizer, and labor have only made things harder.
In many cases, growers decided to pull out walnut trees and either leave the land fallow or switch to crops with steadier returns. This isn’t simply about supply and demand—it’s a long-term change in crop planning. If US walnut acreage continues to fall, you should prepare for an ongoing shortage even if the weather improves next year.
What This Means for You: Price Volatility and Supply Chain Planning
For business owners, buyers, and food professionals, the shortage brings a mix of difficult realities and strategic choices.
It is likely that walnut prices will remain “tight and volatile” into the third or fourth quarter of 2025. Relief in pricing could be limited or short-lived, especially if demand from Asian food makers stays strong and US growers don’t replant lost acreage promptly.
If you plan to use walnuts in your fall lineup or upcoming new product launches, review your ingredient forecasts now. Talk with your suppliers early and often about projected shipment schedules. Depending on the size of your operation, you may want to consider locking in contracts or increasing safety stock to avoid last-minute shortages.
How to Adapt: Practical Strategies for Weathering the Walnut Shortage
With tightening inventories and rising prices, it takes more creativity—and preparation—to keep your business supplied. Here are several steps you can take:
1. Diversify Sourcing Where Possible
Don’t depend solely on one region or one supplier for walnuts. Sourcing from Chile, China, or newer producers can offer some protection against local disruptions. Compare contract terms and traceability from multiple origins. Be sure to request samples, check grading, and clarify lead times. Supply diversification also helps hedge against currency swings and trade risks.
2. Plan for Tariffs and Trade Policy Shifts
Depending on your state or industry, shifting trade policies could affect nut imports and pricing. Keep in close contact with your customs broker or logistics provider, especially if you are importing from South America or Southeast Asia. Review tariff codes and double-check documentation to avoid delays.
3. Review and Adjust Product Mix
If ongoing shortages put walnuts out of reach, consider adjusting recipes or products that depend heavily on them. Can you temporarily blend in pecans, almonds, or hazelnuts—if costs and taste allow? Make sure to update your ingredient labels and communicate changes to customers. Even small substitutions can help you bridge the gap without disappointing your clientele.
4. Stay Proactive with Supplier Communication
Transparent and regular discussion with suppliers is crucial. Schedule monthly check-ins on pricing and delivery timelines. If your business is too small to commit to a full year’s volume, ask about group buys or consortia. Many smaller buyers find success by banding together.
Keeping detailed documentation on your contracts, invoices, and approvals is also wise. Review these documents every quarter to ensure your procurement policies match current market conditions. Once you’ve built relationships and records, you’ll have firmer ground to react quickly if another shock hits.
5. Invest in Process Flexibility
Adjusting your operations may seem daunting, but small tweaks can improve resilience. For example, look into pre-shelled or chopped walnut products if whole nuts become too costly. Review your supply chain for bottlenecks, and train your team on fallback processes. That way, if a shipment is delayed, you can switch gears quickly and keep business running.
The Bigger Picture: Key Takeaways and Outlook
The global walnut shortage is mainly driven by a drop in US production, severe weather, and a slow rebound in acreage. While Chile’s projected harvest and China’s stable production help, they don’t fully close the supply gap, particularly for premium or specialty grades.
At this point, prices are expected to remain well above recent averages until at least late 2025. If demand in Asia or Europe spikes further, or if bad weather returns, these pressures could last longer. For professionals in food, retail, and manufacturing, it’s wise to prepare budgets for continued volatility and to double down on supplier relationships.
Once conditions improve—such as by late 2025 or 2026—you may see some relief if more acreage is replanted and inventories recover. However, ongoing risks from climate, trade policy, and grower exits mean that flexibility and constant review should be built into your sourcing strategy.
For more guides on managing supply chain challenges or diversifying product inputs, see other practical business resources at Redwire Business.
In summary, this is a challenging time for everyone involved in the walnut supply chain. But by staying informed, proactive, and willing to adjust, you can reduce risks and keep your operations moving forward. Monitor your walnut usage, keep documentation of approvals up to date, and check in quarterly with your key stakeholders. Once you do this, you’ll be ready for whatever comes next—and can stay focused on serving your customers well, even during a global shortage.
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