Arabfields, Naïla Mokhtari, North, South and Central America Correspondent — California walnut growers are entering the new harvest season with an unexpected boost in domestic demand after the U.S. Department of Agriculture announced plans to purchase $30 million worth of walnuts.
The planned purchase comes at a critical moment for an industry still dealing with the effects of an exceptionally large 2025 crop, weaker export volumes and uncertainty in international trade. Once completed, USDA purchases of California walnuts under the program will reach $45 million in 2026.
For growers preparing to bring the new crop to market, the announcement offers more than an additional buyer. It could help reduce inventories left over from the previous season and provide some support to prices at the start of the new marketing cycle.
The USDA purchases are being made under Section 32, a federal program that allows the government to acquire agricultural commodities for domestic nutrition programs. The walnuts can be distributed through school meal programs, food banks and other organizations serving households across the United States.
For a third-generation walnut farmer such as Davin Norene of Rio Oso, the timing is particularly significant. California’s walnut industry has faced a difficult combination of high production, weaker overseas demand and trade disruptions that have reduced returns for growers.
The pressure became particularly visible after the record 2025 crop increased supplies available to processors and exporters. Carry-in stocks from that harvest have weighed on the market as growers prepare for another production cycle.
The 2026 crop is now entering harvest, with the California Walnut Commission describing it as the second-largest in the state’s history. That means the industry could face another substantial volume of nuts entering the market even as it works to clear remaining stocks from last season.
The USDA purchase could therefore play an important role in improving the supply balance. By taking part of the crop out of the conventional commercial market, the government can create additional domestic demand while directing food products toward nutrition assistance programs.
The immediate impact is likely to be greatest for growers and handlers facing the challenge of moving large volumes during the early months of the marketing season. A reduction in carry-in stocks could also give exporters and domestic buyers greater flexibility as they negotiate prices for the new crop.
California’s walnut sector remains heavily dependent on international markets, making trade conditions one of its biggest risks. Global market disruptions and uncertainty surrounding tariffs have contributed to weaker export volumes, limiting the ability of producers to absorb years of expanding production.
The industry is also seeking longer-term solutions. Earlier this year, the California Walnut Commission secured more than $3.6 million in USDA funding to expand international market opportunities and promote California walnuts in overseas retail markets.
That strategy reflects a broader challenge facing growers. Government purchases can provide short-term relief, but stronger export demand will be needed to restore a more sustainable balance between production and consumption.
If the USDA purchase helps reduce old inventories and domestic demand remains stable, growers could enter the 2026/27 marketing season in a stronger position than they did a year earlier. The effect on prices will depend on how quickly supplies are absorbed and how large the final crop proves to be.
The USDA’s next crop estimate will be closely watched by traders, processors and growers. Until then, the combination of a large harvest and government purchasing is likely to keep the market focused on inventory management rather than production alone.
For farmers in California’s walnut-growing regions, the new season therefore begins with cautious optimism. The trees are producing heavily, but the industry’s challenge is no longer simply how much it can grow. It is finding enough buyers, at sustainable prices, to keep a historically important agricultural business profitable.
The $30 million USDA purchase will not resolve those structural challenges by itself. But as harvest machinery moves through orchards and the first loads of walnuts enter processing facilities, it gives growers an important source of demand at a moment when the market needs it most.
