Worldwide demand has made walnuts the fourth largest export in California, according to an industry report. The $820 million per year industry has seen record growth in the last five years, with exports now accounting for 60 percent of shipments. Walnut producers reached $1 billion in farm revenue in 2010, producing more than 500,000 tons for the first time ever, says the report.

Access to new markets has helped absorb these gains, industry insiders say. Strong demand from Asia, Europe and the Middle East should propel strong sales again this year.  Here are some highlights from the California Walnut Commission (CWC) report:

• Since the 2008/09 crop year, China/Hong Kong has doubled its imports of California walnuts. China is now the leading export market for inshell California walnuts, with shipments increasing to 121 million pounds. China is actually the world's largest producer of walnuts, but in recent years it has become a net importer due to a fall in exports and a sharp increase in imports from California.

• Germany, the number two export market, is a big purchaser of shelled walnuts. Shelled shipments to Germany are up 30 percent year-over-year. The most recent crop year exports to Germany reached a record high of 82 million pounds.

• A rapidly growing market for California produce exists in South Korea. The recently ratified United States and South Korean Free Trade Agreement (KORUS) will phase out tariffs on walnuts. South Korea just imported about 46 million pounds or $70 million worth of California walnuts.

The report attributes the industry's success to the development of export demand through product promotion, something the USDA Foreign Agriculture Service's Market Access Program (MAP) has played a key role in cultivating. Grants from MAP, which average $4.5 million, go toward partially funding export development activities. Matching funds come from the industry.

The CWC says that health research, using MAP program funds, has helped positively change consumer perceptions about the nutritional benefits of walnuts. This has led to an increased demand for walnuts worldwide.