Diverting California’s Tree Nut Exports

Back during the most hectic days of pandemic-era shipping, California almond growers were expressing their concerns about the quality of service they had been receiving from ocean carriers at the Port of Oakland. Similar expressions of frustration were voiced by walnut shippers, while pistachio growers had also raised issues regarding their long-preferred shipping  routes through the ports in San Pedro Bay. At the time, conventional wisdom framed many of these complaints by noting that many more outbound empty containers moving back to Asia rather than loaded with U.S. agricultural exports. All of this excited the interest of officials in both Sacramento and Washington, D.C.

But industry who could look past the empty container argument and focus instead on the routes that almond shippers in California’s Central Valley relied upon, suggested that a larger issue was the diversion of almond export cargo. Some felt it was inevitable that farmers would begin routing more of their overseas shipments to other ports such as Port Houston or even Norfolk. In 2022, one almond exporter set up a special rail service with the specific intention of moving shipments away from Northern California and to the Ports of Los Angeles and Long Beach. The Port of Oakland, they warned, needed to pay attention to the potential loss of its dominant market position over almond and walnut exports.  

So what’s actually happened?

Exhibit 6 reveals that Oakland’s commanding share of California’s tree nut export trade has indeed been gradually eroded as its in-state rivals in Southern California’s San Pedro Bay and Port Houston acquired larger shares of California’s tree nut export trade. In 2020, Oakland accounted for 74.2% of all California’s tree nut exports, while the Ports of Los Angeles and Long Beach held a combined 21.3% share. Port Houston then held a slender 1.4% share, while only a trace (0.03%) trickled out of Norfolk. By last year, Oakland’s share had diminished to 67.0%, while the two San Pedro Bay ports claimed a 24.0% share. Port Houston’s share had grown to 5.9%, while Norfolk’s share remained small but edged up to 1.1%.

It is a trade given to the sort of abrupt monthly shifts in port market share that may make the identification of trends illusive in the short-term, as Exhibit 7 demonstrates. Still, it does appear that the Port of Oakland’s geographic proximity to Northern California’s almond and walnut production areas has become less of an advantage as recent logistical investments are facilitating the transport of higher volumes of almonds and walnuts to the ports of Southern California, Texas, and even far-off Virginia.