This gall in the shape of a pine cone, appears on willow stems and confuses many because of its resemblance to a pine cone. In the summer a small fly called a gall gnat midge (Rabdophaga strobiloides) deposits an egg on the stem. The new larva secretes a substance on the stem which causes the willow to go into overdrive building a multi-layered chamber composed of hardened material that would have been leaves had stem growth not been arrested.
The development of the gall is seen in the photos below. Inside snugly resides the wintering larva, which will metamorphose into a gnat when warm weather comes again.
If you split one of these cones open (photos below) you will find the small pink larva resting inside, unless some of its wasp-like parasites have invaded the chamber.
Above: 1st & 2nd photos - This is what you will see in the Winter. The gall formation sometimes takes on a winter coat of fine fuzzy hair. 3rd photo - Here you see the summer development of the gall as the plant produces an excess of leaves enveloping the larva.
Above: If you carefully peel open the gall you will usually find the larva alive and well inside. It develops its own version of anti-freeze to survive the winter cold.