Hazelnut plantings in Oregon’s Willamette Valley have more than doubled over the past decade, and many people are asking about the long-term assessment of the hazelnut industry. Are there too many hazelnuts being planted? Can the market absorb the new plantings?
The confident response from the Oregon hazelnut industry surprises many outside observers.
“Oregon hazelnut production only makes up 3-4% of the world’s hazelnuts, and even after current plantings reach full production, we will still be under 8%. We are a very small subsection of the nut industry and even with the new Oregon plantings, our new production will barely be a rounding error in world production,” states Rick Peterson of Northwest Hazelnut Company.
Because Turkey produces nearly 70% of the world’s hazelnuts, its crop is the “commodity price” for the world hazelnut market. Over the past 15 years, a few key market leaders in Oregon have redirected the Oregon industry into select “niche” markets such as the “premium quality kernel” market and lucrative Chinese inshell markets. By specializing in niche markets, Oregon farmers have enjoyed over a decade of premium field prices that have exceeded the Turkish “commodity price” by 15-20% on average.
“It has taken nearly two decades of hard work to get the world market to accept the Oregon hazelnut as the premium product, but now there is significant demand for high-quality hazelnuts at the Oregon Premium” price we expect.” stated Shaun George of George Packing Company.
Willamette Valley farmers have been asking if the industry is ready for the doubling of production. In both the ability to sell the crop at the premium, and the ability to process the crop quickly, safely, and efficiently; Oregon processors radiate confidence when answering, those questions.
“First, the premium priced markets have already been developed to consume many more Oregon hazelnuts. Second, Oregon’s hazelnut companies have inadvertently overbuilt their processing plants, which has led to a substantial, and unfortunate, over-supply of processing capacity. We need more hazelnuts to supply existing markets and to fill our plants. Oregon farmers can plant hazelnuts with confidence,” stated George.
“As an industry we are still small and lack the needed production to realize full efficiencies in our supply chain. The biggest problem for the Oregon hazelnut industry is that there are not enough hazelnuts to maximize processing efficiency and to fill the demand of our premium markets. These issues mean that the industry is currently leaving money on the table. With more production and more plant through-put, we would be able to capture and return to the farmers,” concluded Peterson.
Fun Fact: Oregon only grows 4% of the world’s hazelnuts but supplies 99% of the US domestic grown hazelnuts.