NASHVILLE, TN – Walnut producers are facing tighter margins as rising production costs and global competition offset recent price gains.
Analysis from Terrain economist Matt Woolf shows walnut prices have recovered from record lows in 2022, but higher input and establishment costs are squeezing profitability. At the same time, global competition from countries like China and Chile is intensifying, eroding export share, and adding pressure on U.S. markets.
Cost structures are a major concern. Establishing a new walnut orchard now takes significantly longer to reach profitability. Under current conditions, break-even may not occur until the 13th to 17th year, compared to the 8th or 9th year under earlier cost assumptions. Higher interest rates and inflation-adjusted operating expenses are key drivers of that shift.
For existing orchards, the break-even price has also climbed. Producers now need about 63 cents per pound to cover costs, compared with roughly 38 cents per pound in 2017.
With older orchards being removed and fewer new plantings underway, long-term supply adjustments may follow.
Farm-Level Takeaway: Rising costs are significantly extending walnut profitability timelines.