Nut production in the US has been increasing rapidly for at least the last 5 decades. Almond production increased by an average of 4% per year over the last 10 years, walnut production by 16% per year, and pistachio production by 16% per year. Not only is the supply of nuts skyrocketing, but also domestic demand within the US. Per capita consumption of virtually every nut species is on the increase. Per capita consumption of almonds, walnuts, and pistachios is a massive 2.34 kg for only these three species and an average increase of 5% per year over 10 years. Even though domestic consumption is on the rise, production is increasing comparatively faster and a larger proportion of the crop will be destined for exports in the future.
US going nuts for almonds, walnuts, and pistachios The nut industry in the US has been one of success. The US dominates world almond production and exports, and an estimated 80% of world commercial almond production is centered in California. The area under most nuts in the US is increasing, and technological advances in tree cultivars, irrigation, and fertilization techniques are increasing yields. A shining example of the improved cultivation techniques is the 2021pistachio crop, which was supposed to be an off-year for pistachios, yet somehow turned out to be a record 1.167 billion lbs (529,244 mt). Domestic consumption of nuts in the US is one of the main drivers of success in the industry.
While most of the US almonds are bound for exports, domestic consumption has been on the increase. About a third of the crop goes for domestic consumption, and an impressive 401,892 mt (kernel basis) was consumed domestically in the 2020/21 season. The USDA forecast consumption to drop slightly in the 2021/22 season, but the 10-year CAGR ending 2021/22 is still a wholesome 4%. More impressive is per capita consumption, which was only 0.88 kg/capita in 2011/21. Fast forward to 2021/22 and it is 1.17 kg/capita.
Source: USDA, Worldometer
Domestic consumption of walnuts also increased at a CAGR of 4% over the 10 years ending 2021/22, but plateaued from 2016/17. Domestic consumption increased only slightly over the last 5 years, in line with the growth in the US population. This means per capita consumption has been fairly flat. Nuts are often marketed as a healthy snack. Almonds, pistachios, and cashews are getting relatively more attention as snacks than walnuts, but walnuts remain a popular ingredient in many other dishes.
Source: USDA, Worldometer
The real success story has been pistachios. While much has been said about the significant advances in pistachio production in the US, the successful marketing and promotion of pistachios in the domestic market is also a remarkable achievement. As there is more and more focus on healthy snacking, pistachios, in particular, are gaining popularity. Domestic consumption of pistachios increased from only 73,321 mt in 2011/12 to an incredible 179,378 mt in 2020/21.
While the USDA has already published domestic consumption estimates for almonds and walnuts for 2021/22, figures have not been released for pistachios. However, over the last 5 years, domestic consumption increased by an average of 10% per year. When comparing the Administrative Council for Pistachio’s (ACP) shipment reports, domestic shipments for the first 4 months of the 2021/22 season were 8% higher than 2020/21. It would thus be fair to assume that domestic consumption could be at least 8% higher in 2021/22. This would bring domestic consumption to 193,728 mt and per capita consumption to 0.58 kg. This would mean that Americans now eat more pistachio than walnuts. Both walnut and pistachio consumption is given on an in-shell basis. The industry standard is to use a conversion of 44% for walnuts and 50% for pistachios to convert from in-shell to kernel basis, giving pistachios the edge.
Source: USDA, ACP, Worldometer
Cashews popular, but no domestic production
The US is the world’s second-largest consumer of cashews (behind India), and there is no commercial production within the US. Cashews are more suited to tropical climates, with Ivory Coast and Cambodia leading world production. The US is importing more and more cashews and cashew consumption is on the rise, as is the case with most nuts. In the first 11 months of 2021, the US imported 166,671 mt of cashews and when December figures are finalized, it might be close to 180,000 mt for the year. Since there is no local production, yearly imports and domestic consumption are highly correlated. Per capita consumption increased from only 0.36 kg ten years ago, and could well be close to 0.54 kg in 2021 based on imports.
2011/12 to 2019/20 based on INC data, 2020/21 and 2021/22 based on imports and import projections
Source: INC, ITC Trade Map, Worldometer
Pecan, Macadamia, and Hazelnuts
The US consumes much less pecan, macadamia, and hazelnuts. Pecans are grown in several states, with New Mexico and Georgia the largest producing states. Total US production (in-shell) was 138,508 mt in 2020. Domestic consumption is increasing and was around 80,000 mt in 2019 (shelled). When converting domestic consumption from shelled to in-shell pecans, it shows that domestic consumption outstrips production. Imports from Mexico often make up the shortfall. The US also exports many of its in-shell pecans to Mexico and re-imports the shelled pecans.
Hazelnuts are grown almost exclusively in Oregan and production (in-shell) in 2020 was 63,000 mt. All the US’s commercial macadamias are grown in Hawaii and production (in-shell) in 2020 was 17,917 mt.
Source: INC, USDA
Retail Sales
While many nuts have specialty uses, for example, pecan pie, most of them are sold as snacks. Different nuts are not necessarily perfect substitutes, but there is much competition in the snack market. As a customer, there is some flexibility when choosing a nut to snack on. When comparing the retail of nuts, specifically sold as snacks, price seems to be a primary driver of domestic consumption.
To make a fair retail comparison, Walmart’s online retail sales site, for the Sacramento Supercenter in California was used and nuts sold with the Great Value packaging were compared. It showed that almonds, walnuts, and pistachios were priced cheaper than other nuts for the end customer, which could explain their popularity. Note that pistachios are sold in-shell, which means they are actually twice as expensive as walnuts or almonds on a shelled basis, yet this might not be a consideration for the consumer.
Even though cashews will cost end consumers slightly they are still popular. Pecans and macadamias, which are priced much higher, are consumed much less. Hazelnuts are not popular as a snacking nut and are normally intended for other uses.
Source: Walmart
Looking forward
Nuts has been marketed heavily to the domestic market, and as is obvious from domestic consumption figures, with great success. However, in the long run, domestic consumption might reach a plateau. While this plateau will be hard to estimate, there could eventually be a shift from targeting the domestic market to targeting the export market. Of the locally produced walnut crop, in 2021, only 18% was for the domestic market, compared to 33% 10 years ago.
Despite the large increase in domestic cons of almonds, still only a third is sold domestically, due to the increased production. As a linear trend over the last ten years, a larger portion of the crop is being consumed domestically, however, over the last five years, the trend is flat.
Source: USDA
Sources