Turkish freeze fuels Oregon nut sales
According to Michael Klein, associate director for the Oregon Hazelnut Marketing Board, "Nobody really knows for certain the extent of the damage."
But he said industry officials are expecting it to be significant. He said he has seen pictures of Turkish hazelnut trees totally encased in ice.
And what's bad for Turkey is, by definition, good for Oregon. Any shortage is going to send prices shooting up and have buyers scouring the world for alternative suppliers.
Klein said the Oregon crop matures four to five weeks after Turkey's, on average. He said Oregon also experienced a cold snap this season, but it came earlier enough that it didn't hurt the crop.
"Hazelnut trees are unique in that they bloom in the dead of winter," he said. "They're pretty hardy little trees," he said, but the Turkish freeze came at a critical moment in nut development.
Klein said Turkey typically produces 700 to 800 metric tons. He said the latest forecast is for a crop of 480 and 550 metric tons this year — a substantial falloff.
He said the Turkish harvest is already underway. But he said the Turks pick their nuts by hand and spread them out on the ground to dry before collecting them for processing, so solid numbers are yet available.
Prices shot up immediately, on spec, and have remained elevated ever since, Klein said.
"It doesn't affect the Oregon crop in terms of quality or quantity," he said. But if supply remains low and prices high, it could open up new markets for local growers and allow them to reap a big return.
There is a negative aspect as well, though.
Increased demand will force growers to choose among rival buyers, and that forces them to strike a delicate balance, Klein said. "You don't want to short your existing customers, but you want to attract new ones," he explained.
For the past five to six years, Oregon growers have shipped two-thirds to three-fourths of their total production to China. "That market has been good to Oregon," Klein said.
And he said they growers have had no trouble selling the rest on the open market.
Klein said what limits the scope of the potential bonanza for local growers is their relatively small piece of the market. While Oregon accounts for 99 percent of American production, it only accounts for 5 percent of world production, he said.
Throughout Yamhill County, farmers have been replanting grass-seed fields and other suitable lands in hazelnuts of late. And so varying extents, that has also been occurring elsewhere in Oregon.
Based on sales volume being reported by nursery operations, Klein said, Oregon could be experiencing as much as a 50 percent expansion of its hazelnut acreage, taking it from 30,000 acres to 45,000 acres.
Once the new trees begin to mature, production figures to take off. And if prices remain high, that will no doubt serve as an inducement for yet more planting leading to yet more production.
According to the U.S. Department of Agriculture's National Agricultural Statistics Service, Yamhill County led the state in planted acres in 2012 at 8,346 and Marion County came in second at 8,036. However, Marion led 6,466 to 5,622 in bearing acres.
As the trees mature, the production in both the state and county will increase. If prices remain high, that will bring additional money for growers to plant additional acres — or to replace aging trees with hardier, better-producing varieties, Klein said.
The dominant tree today is the Jefferson, developed by Oregon State University. Klein said it produces a nut suitable for sale either shelled or unshelled, giving growers additional options.
"In years like this, where demand is going to come from manufacturers, you want shelled products," he said. But that isn't always the case, and the Jefferson variety offers flexibility.
Klein said trees in a number of older orchards are suffering from Eastern Filbert Blight. They need to be replaced with newer varieties that are resistant to the disease, he said, and stronger prices and revenues serve as a powerful incentive.
He said the typical tactic is interspersing starts in mature orchards as part of a gradual conversion process. "You don't want to bulldoze out an mature orchard when prices are at a record level," he noted.