A Tough Nut to Crack

Photo: Brenda Frketich

Scientific advancements have allowed hazelnut crops to boom in Oregon, but the trade war with China and Turkey’s dominance of the market present a challenge. 

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The town of Ordu, Turkey, lies more than  6,000 miles away from Oregon’s town of Donald, with an entire ocean between them. Still, if two residents happened to meet at the airport,  they would be able to have a lively conversation on at least one topic: hazelnuts. 

Both towns lie on the 45th parallel, a latitudinal line upon which the climate for hazelnuts is just right.

Turkey is the largest producer of hazelnuts in the world, and the primary competitor with Oregon’s growing hazelnut industry. Turkey produces around 70% of the world’s hazelnuts, while Oregon produces around 5%. 

The state is more saturated with hazelnut farms than any other time in its history. The number of planted hazelnut acres in Oregon has tripled over the past decade. More than 50,000 acres bear nuts. More than 30,000 acres will begin to bear nuts over the next five years.  

Turkey is at an economic advantage because of lower cost of labor.  Its economy is also weighed down by inflation, which has reduced the cost of its exports and flooded the market. 

But Oregon has some secret weapons to compete with cheaper Turkish nuts. 

One of these  is a state-of-the-art processing facility in Donald, Oregon, owned by Hazelnut Growers of Oregon, a 180-member cooperative. The plant has the capacity to process  160,000 pounds of hazelnuts per hour.  

Additionally, Oregon’s hazelnut crops have long benefitted from Oregon State University’s agricultural researchers, which have developed trees resistant to eastern filbert blight, a tree-killing fungal disease that wrought havoc on Oregon’s hazelnut farms 30 years ago. 

RELATED STORY: Nuts to the Blight

In 2018 a record-breaking hazelnut harvest occurred in Oregon, partly due to the mild summer. The USDA National Agricultural Statistics Service estimates growers will harvest 4% fewer hazelnuts this year compared with 2018. It expects those numbers to increase consistently in coming years. 

Terry Ross, executive director of the Hazelnut Growers Bargaining Association, says the president’s trade war is having an impact. More than half of all hazelnuts grown in Oregon end up in China, so the tariff tit-for-tat is a drag on profit.

Ross’s organization, which sets the minimum base price for in-shell hazelnuts, raised the nut’s minimum price to $.83 per pound last month, up from $.62 last year. 

Though not all hazelnuts will be sold at the minimum price, the raised cost indicated a more confident outlook for the hazelnut market compared with last year. 

Even though the trade war persists, Ross says the lower prices last year were to compete with the inflated Turkish currency. 

“The [price] last year was determined by insecurity,” says Ross. “There were issues last year with the Turkish lira, which had inflated to about three lira on the dollar.”

But Ross says there is less insecurity this year. Despite the tariffs, growers know what to expect.

“This year we know what the tariffs are going to be. We don’t anticipate any reversal or any relief,” he says. “The markets are making all the right moves.”

Related Story: Trade War Pounds Oregon From All Angles 

Greg Thorsgard, chief operations officer at Hazelnut Growers of Oregon, says the ability to increase consumption in the domestic market has been and will continue to be important for hazelnut growers during the trade dispute and beyond. 

“One of the weaknesses of this crop is it is dependent on export. We’re trying to change that,” he says. “We’ve developed four baking items, a couple of whole-nut products, and sliced hazelnuts like the kind to put on your salad. In addition, we’ve put out five new snack items you can find at Albertsons and Safeway next month.”

Still, if the trade issues were resolved, Thorsgard says growers would be in an even better position. 

“The trade war has held prices down significantly, and growers have suffered because of that,” he says. “The demand still seems to be out there, but not at the prices [hazelnuts] are at currently. Hopefully we can work through the tariff issues.”

For third-generation hazelnut grower Brenda Frketich, owner of Kirsch Family Farms, being able to communicate with consumers about where their food comes from and how it is processed is part of creating a niche in the market.

“Personally I have been a bit innovative in how I try to put our farm in the public light more often than many other farmers,” she says. “I learned while down in LA for school that this disconnect of people to where their food comes from is not a small factor. I have taken it upon myself to try to increase the transparency of how we grow food on our farm.” 

The future of hazelnuts seems bright in Oregon, but challenges could still be on the horizon. Turkey’s hazelnut production has ebbed due in part to irregular weather patterns associated with higher global temperatures. 

Hazelnut trees are a cyclical plant. After each harvest the tree must spend a year to recover. 

“This year was a mild summer with intermittent rains and couldn’t have been better. Last year was just the opposite, it was a very dry summer that finished off late into the season so you had smaller nuts and the kernels weren’t as full,” says Thorsgard. “But I live in the Northwest. If there’s one thing I’m used to, it’s irregular weather patterns.” 

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