The USDA Foreign Ag Service forecasts Ukraine’s walnut production at 101,300 metric tons (MT) for marketing year (MY) 2024/25, a 4 percent decrease against MY2023/24. Household production continues to slide as old, non- productive trees are being chopped down. Post forecasts production areas for industrial growers to remain flat, as there is currently little appetite for long-term investments due to Russia’s full-scale invasion. Post forecasts MY2024/25 exports will decrease by 9 percent as large ending stocks, which were predominantly amassed during MY2021/22, have been slowly depreciating for two consecutive MYs. At the same time, rebounding imports of tree nuts in line with economic recovery and adjustment to the “new normal” are putting downward pressure on volumes of domestically consumed walnuts.
SSSU published official production numbers for CY2023. The total walnut reported area is 16,400 ha, a 4.1 percent decrease compared to the previous CY. Walnut production is reported at 106,120 MT, similar to the previous CY. Post accepts these as MY2023/24 estimates. Note that a MY for Ukraine starts in September and ends in August; therefore, MY2023/24 refers to the period between September 2023 and August 2024.
The main reason for sliding production area is a constant area decrease by households (Figure 1). The majority of walnuts harvested in Ukraine are produced by individuals or small private family farms harvesting trees on their land or in the vicinity of their farms. This category of producers is not typically concerned with the application of fertilizers and agrochemicals and uses manual labor to harvest and shell walnuts. Harvested walnuts are typically sold to intermediaries, who assemble batches for export or store them in-house in times of low demand or unfavorable prices.
In CY2015, over 95 percent of Ukrainian walnut production area was on small, private family farms. In CY2023, these farms represented around 74 percent of total area. Post predicts this downward trend in walnut production on family farms will continue in the medium to long term as aging trees lose their productivity and are chopped down. However, family farms still enjoy a dominant position in production volumes, as they hold an absolute majority of the bearing tree area compared to industrial growers – 81 percent for CY2023.
The main reason for decreasing production area among households is Ukrainian farmers began developing walnut orchards for commercial purposes in 2009. The average size of these commercial orchards ranges from 20 to 50 ha. The establishment of commercial farms can be attributed to pre-2022 GOU financial support for orchard and berry producers and the establishment of the agricultural land market in Ukraine. Industry notes that farmers were investing in high-yield commercial orchards with multiple walnut varieties, installing irrigation systems, and applying fertilizers. Some regions, especially in central and southern Ukraine, require irrigation to secure expected yields, while orchards in the northern part of Ukraine may experience lower yields because of the cooler climate. In southern Ukraine, seedlings can be planted in autumn, while in northern Ukraine, it is still advisable to plant in spring to avoid winter frost damage for newly planted trees. Walnuts are normally harvested from the end of September through the end of October.
According to SSSU data, commercial growers scaled down their total walnut areas to 4,300 ha for MY2023/24 from a peak area of 5,600 ha in MY2019/20. This might be an indication that some growers went out of business due to uncertainties caused by Russia’s full-scale invasion of Ukraine and are subsequently cutting down or leaving behind the newly established orchards.
Professional growers are currently reluctant to make long-term investments due to the ongoing Russian aggression against Ukraine. Fruit tree import dynamics confirm this (Figure 2). The initial investment required to establish an orchard ranges from $1,200 to $1,800 per ha. Read the full report from the USDA Foreign Ag Service HERE.
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