(CNN) — The world loves America’s nuts. The United States is the largest producer and exporter of tree nuts such as almonds, walnuts and pecans. That’s why international trade is so vital to this industry.
It’s also why the hefty retaliatory tariffs that China has imposed and the ones India is threatening to levy have left many growers uncertain about their next steps. Sales are faltering, prompting some growers to hold off on buying new equipment and others to halt plans to plant more trees.
The trade war is hurting California, in particular, since that’s where many tree nuts grow.
The Golden State produces more than 80% of the world’s almonds and exports 70% of them, according to the Almond Board of California. This year is expected to be a record crop of 2.45 billion pounds.
The board has spent more than two decades building its trading relationship with China, which represents a $600 million business, said Richard Waycott, the industry group’s CEO. Some 9% of US almonds wind up in China.
China, however, has raised tariffs on America’s nuts twice in recent months in retaliation for President Donald Trump’s hikes on the tariffs on aluminum and steel the country ships to the United States. Almonds now carry a levy of 50%, up from 10% earlier this year.
This has led to a decline in shipments in May and June, compared to last year, Waycott said. Also, commitments for new crops — which have been sold, but not yet shipped — were “down considerably” in May, June and July, compared to last year.
“We have a lot of additional production coming on and certainly don’t need trade problems in an environment like that,” said Waycott, who says he has also heard anecdotal reports of price drops.
Stuart Woolf is confident that he’ll be able to sell all of the roughly 20 million pounds of almonds he grows at Woolf Farming Company in Fresno, California. However, he isn’t shipping as much of his crop to China, shifting instead to other destinations. This is a step in the wrong direction, he says.
“China’s growing economy and growing middle class has really driven almond consumption,” Woolf said. “It’s a huge target market for our industry that’s now being put at risk”
Woolf also grows pistachios, and he’s more concerned about the impact of Chinese tariffs on that crop since the United States faces more competition there. China raised the tariff on that nut to 45%, up from 5%.
His friends in the pistachio processing industry, who sell the nuts on behalf of growers, say they haven’t sold any to China this year. That’s a major change from this point last year, when they had sold around 100 million pounds, or roughly half the total for the year.
All of this is leading Woolf to think twice about expanding his groves.
“I’m pumping the brakes on planting new pistachio and almond orchards until we see how this shakes out,” he said.
Other growers are looking to expand into new markets.
R.G. Lamar operates one of the largest pecan farms in Georgia with 2,300 acres of trees. He sells 60% of his crop to China, but is now looking to diversify more since tariffs on pecans jumped to 47%, up from 7% earlier this year.
Aware that much of his farm is dependent on trade with one country, Lamar created a snack business, Front Porch Pecans, a few years ago. Now, he’ll focus more on growing this domestic consumer segment, especially since demand is up.
Long term, he thinks it will be better to have a more diversified business. But, it’s not a simple switch.
“It’s not cheap to completely change your marketing strategy and try to develop a new market,” Lamar said. “All that takes resources and it may not work. There’s uncertainty in that, too.”
The Trump administration is aware that its global trade wars are hurting the American agriculture industry. Last month, officials announced they would provide up to $12 billion in aid to certain farmers and ranchers, including sending them money and purchasing excess inventory.
Woolf, however, said the measure won’t help him much. The tree nut industry isn’t eligible for the payments the federal government plans to dole out, and growers produce too much to send to food banks and other nutrition programs.
“I don’t think they could buy enough to make a difference,” he said.
™ & © 2018 Cable News Network, Inc., a Time Warner Company. All rights reserved.