Hazelnut prices set new record
'Very late' Turkish crop sends ripples through industry
By JOHN SCHMITZ
For the Capital Press
The Hazelnut Growers Bargaining Association announced Sept. 30 that four of the five major cash handlers have agreed to pay growers a record-breaking $1.10 a pound for cleaned, dried nuts.
That's up five cents from 2010.
"It's the highest (HGBA) initial field price in history," said HGBA manager Mike Klein, adding that the bargaining association and four of the cash handlers have agreed to revisit the price in the spring, when growers would be paid more should wholesale nut prices exceed expectations.
"If there is an adjustment in the (wholesale price), the first five cents will go 100 percent to the growers," Klein said. "If the market has improved beyond that, the next five cents stays with the packers, and beyond that it's a fifty-fifty split."
One cash handler, Westnut, a wholly owned subsidiary of Hazelnut Growers of Oregon cooperative, has set $1.20 as the initial price it will pay its growers and the base price paid co-op members.
"Current negotiations in our major global markets have convinced us that we can deliver this value to you," HGO/Westnut president and CEO Compton Chase-Lansdale said in a letter to growers.
Larry George, co-owner of George Packing, one of the four signatories to the HGBA price agreement, said that the initial HGBA field price "is going to continue to climb as kernel prices get stronger. I'd say the vast majority of packers are going to pay (an adjusted price of) over $1.15 and don't see any reason why it won't be over $1.20."
As is always the case, the huge Turkish crop has a big impact on Oregon hazelnut prices. But this year there's a different twist.
Driving the higher price for Oregon growers in 2011, Klein said, is a much shorter Turkish crop, estimated at between 450,000 and 475,000 metric tons, off 200,000 to 300,000 tons from last year.
Klein said that the Turkish crop is also "very late," which compresses the major selling season even more, given that Oregon's crop is two weeks tardy.
Further, he said that the weaker Turkish crop, which is sold mostly in kernel form, is driving up the prices paid for kernels worldwide and offering a good alternative market for Oregon nuts, most of which are exported in-shell.
That said, because Chinese New Year is earlier this year, Klein said there's a risk involved should handlers either miss that strong in-shell market or decide to sell more of their nuts into kernel markets.
"If you hold product off and miss the early market in China and expect that kernel prices will remain strong, you're taking a big risk," he said.
Oregon's 2011 hazelnut harvest is estimated by the Portland field office of the National Agricultural Statistics Service to come in at 41,000 tons.