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Filbert frenzy.

Byline: Sherri Buri McDonald The Register-Guard

A forecasted 20 percent drop in the Oregon hazelnut harvest this year, coupled with a much smaller than usual crop out of Turkey - the world's largest producer - means higher prices and potentially new markets for Oregon hazelnut growers.

But local hazelnut lovers shouldn't worry that they'll be unable to get the nuts, people in the industry said.

"There are a number of companies who specifically process and distribute products for the Northwest market, and they will continue to do so," said Mike Klein, associate director of the Hazelnut Marketing Board.

Local grower Gene Tinker said he thinks there will be hazelnuts, but they might be priced more like almonds or walnuts.

"I think the consumer is going to be able to find them, but they might be a little more expensive," he said.

"I doubt it's going to affect the local crop that much," said Dwayne Bush, who grows hazelnuts on 400 acres in Junction City and Eugene.

"We still plan on having them at our fruit stand (Bush's Fern View Farms), and I don't see us raising the price considerably."

Oregon produces 99 percent of the U.S. hazelnut, or filbert, crop, but only 5 percent of the world's crop.

Turkey usually produces 70 to 75 percent of the world supply, Klein said.

But a severe freeze in Turkey this spring may have reduced Turkey's projected harvest of 700,000 to 800,000 tons down to perhaps 500,000 tons, he said.

"They don't know the extent of the damage," Klein said. "They'll know when every thing is in and most is sold; they don't have a scientific method for crop estimates."

Oregon, on the other hand, does have a scientific method for predicting the state's hazelnut crop. That recent forecast, based on samples taken in early August, predicts that Oregon will produce 36,000 tons this year, down 20 percent from 45,000 tons last year.

Filberts are a cyclical crop, with a light year typically following a heavy one, said Tinker, who grows Barcelona filberts on 43 acres near Jasper, southeast of Springfield.

Last year was a good year - with production nearing the recent peak of 47,000 tons in 2009, according to the National Agricultural Statistics Service.

The upshot of a smaller crop for local hazelnut growers and filbert fans is "it decreases the volume available to sell, and it will also lead to the industry taking a close look at where the product is marketed," Klein said.

"There's not much (growers) can do at this point other than try to bring in every last possible nut they can when harvest begins," he said. "With that big of a drop in worldwide production ... and increasing demand over the years ... this puts enormous upward pressure on prices."

Klein declined to speculate how high prices might soar, but he said prices for growers already were at record levels last year and "demand for hazel nuts is hot."

"You go where the price is best," he said.

One area grower, Hazelnut Hill, south of Corvallis, said on its website that it will not be selling hazelnuts directly to the consumer for at least a year, starting Sept. 15, because of the rising prices that in-shell hazelnuts now command. Instead, it will sell directly to a large packer, the company said on its Facebook page, as the owners transition to organic.

"Why? Frankly, the field price for inshell hazelnuts is so high it leaves us no margin to cover the costs to process, pay employees and sell our nuts at a reasonable price to you," the company said on its website. "Over the past five years we have observed in pecans, walnuts and pistachios the effects of globalization on the price of these commodities. We were forced to stop offering some of these nuts like pecans and walnuts because the price became too high. We will still be operating our hazelnut orchard and hazel nut tree nursery businesses. We will post information on our website and Facebook page keeping you informed of our activities."

Recently Oregon's No. 1 market has been China, which in some years has bought 60 to 75 percent of Oregon's crop to be eaten as a snack, straight out of the shell, Klein said.

Now with the expected smaller Turkish harvest, makers of chocolate hazelnut spread such as Nutella, ice cream products and baked goods are turning to Oregon suppliers.

"This year the demand in that market is going to put pressure on the Chinese market for the tonnage," Klein said. "If the food manufacturing companies in the U.S. can't get their supplies from overseas, as they might have in prior years, they're going to turn to Oregon."

Bush, the local grower, said, "the packers are busy trying to crack as much as they can to capitalize on (the food manufacturing) market, which will put a squeeze on our Chinese customers because that's where most of our crop has gone the last six or seven years."

Both Tinker and Bush said they were a bit surprised by the expected 20 percent drop in Oregon's harvest.

"I don't think mine is down 20 percent - maybe 10 percent," Tinker said.

"I think that the southern (Willamette) Valley has a very good crop this year," he said. "It may not be as big as last year, but some growers are saying it is as big."

While the southern end of the Willamette Valley looks like it has a good crop, he said, "the northern end is quite a bit lighter."

Tinker said he hopes that prices find the right balance - high enough to reflect the lower supply, but not so high that customers decide not to buy.

"I think we'll have record prices, but I don't want to price us out of the market, either," Tinker said. "I don't want the processors to price it so high that we lose customers."

Follow Sherri on Twitter @sburimcdonald. Email

Oregon hazelnut forecast

In the first two weeks of August, federal experts randomly selected two branches from two trees at 300 hazelnut orchards in the state. Then they took the branches to a regional office where the nuts were picked, measured, weighed, cracked and analyzed to come up with the 2014 crop estimate.

The National Agricultural Statistics Service has a pretty good track record predicting Oregon's annual hazelnut crops. Only seven times in the past 25 years has the service's estimate been off, in either direction, by 10 percent or more, said Chris Mertz, director of the service's Northwest region.

2014 estimate: 36,000 tons

2013: 45,000 tons

2012: 37,000 tons

2011: 38,500 tons

2010: 28,000 tons

2009: 47,000 tons

2008: 32,000 tons

2007: 37,000 tons

Source: National Agricultural Statistics Service
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Title Annotation:Business
Publication:The Register-Guard (Eugene, OR)
Geographic Code:1U9OR
Date:Sep 7, 2014
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