Hazelnut Growers Bargaining Association Executive Director Terry Ross is optimistic about the 2020 ‘on-year’ crop of Oregon hazelnuts given the successful 2019 marketing season.
After a chaotic 2018 marketing year, 2019 was much more stable, Ross said. Markets absorbed large global supplies and prices rebounded.
Oregon hazelnut growers, who harvest nearly 100 percent of the U.S. hazelnut crop, but less than five percent of the world’s hazelnuts, produced 43,000 tons in 2019, slightly less than the 49,000 predicted by USDA. Growers were coming off a record year with total production at 51,000 tons in 2018, but also a year that saw low prices. The three-tier pricing system in 2018 saw in-shell hazelnut varieties at 62 cents per pound and 81to 91 cents per pound for kernel varieties.
A low carryover from 2019, increased global demand for hazelnuts, and market stability are factors contributing to Ross’ optimism. Tariffs remain in China, but there is less uncertainty about their demand for in-shell varieties. China has historically been one of the largest markets for Oregon hazelnuts, favoring in-shell varieties. One third of the market was lost in 2018.
He said the 2019 minimum price of 83 cents per pound set by the association was based on expectation of a large hazelnut crop in Turkey coupled with a small carryover in supply.
Normally, Ross said, there is a small bump in demand with a small carryover and then prices weaken as the new crop comes in. However, he said demand remained strong and packers were able to deliver bonuses to growers. The minimum price for hazelnuts, he explained, means that cash packers can’t pay less. But as markets strengthen and prices improve, packers take the first three cents off the price and the rest goes to the grower.
There was no tiered pricing for hazelnuts in 2019, Ross said, citing risk for packers.
Healthier prices in 2019 have also encouraged growers to plant more trees. Ross said he has seen an uptick in plantings and believes acreage will continue to increase as growers realize better returns. There are now about 50,000 bearing acres of hazelnuts and another 30,000 of young trees in Oregon. Jefferson is the predominant variety.