High Hazelnut Prices a Bonus For The US?

Spend Matters welcomes this guest article by Jara Zicha of Mintec.

In recent weeks, the Turkish media has released news about frosts in Turkey’s northern regions, which may have affected the development of this year’s hazelnut crop. Reports are varied on production volume – some camps say that the projected production of 650,000 tonnes would not be achieved this year, while others were convinced that the impact of the frost would be negligible. While it might be too early to say what the impact of the frost could be, we can say with great confidence that it has been noticed by those involved in hazelnut procurement.

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If the frost reports are accurate, it would be a second year in a row in which Turkish hazelnut production has been damaged by early spring frosts. Last year, severe frosts at the end of March and early April during blossoming led to a sharp reduction in supplies. Last year’s crop has been estimated at 410,000 tonnes, down from 550,000 tonnes and 660,000 tonnes in 2013 and 2012, respectively. As a result of reduced supplies, hazelnut prices surged from $2.50 per pound in March 2014 to $6.20 per pound in March this year. Despite the sharp rise in the prices, demand has kept pace, putting more pressure on the market.

However, the current production issues in Turkey, the largest producer, could be a blessing for US hazelnut growers. Unlike almond or pecan production, the US is a small player in the hazelnut market. The US accounts for about 4% of world hazelnut production, with the vast majority from Oregon, a state that has been under constant threat from the Eastern Filbert Blight (EFB). EFB is a disease that occurs naturally on native wild American hazelnuts and completely wiped out commercially grown European cultivars in the northeast. However, with the recent introduction of EFB-resistant cultivars, Oregon farmers have been systematically replanting their orchards that should ensure higher crop yields in the years to come. Acreage has expanded rapidly as well and is currently estimated at around 42,000 acres with about 10,000 acres not yet bearing, according to Michael Klein, an executive director of Oregon Hazelnut Industries Office. Increased revenues resulting from the higher global prices could be invested into new machinery and facilities that could also improve the production prospects.

Americans have not yet found their passion for hazelnuts! Hazelnut consumption in the US is estimated at around 5oz per capita per year, compared with French or Italian consumption that stands at over 56oz. Could this be an opportunity for the US hazelnut farmers to explore the potential of the hazelnut? Could we be witnessing the birth of a revival of the US hazelnut industry?

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