Global factors expected to drive down prices for 2017 nut crop as local producers continue the harvest

Oregon's hazelnut harvest is underway and the industry is poised for a smaller yield this year. But the nut quality is anticipated to be better than the 2016 season.GARY ALLEN - A worker at Willamette Hazelnut Growers collects nuts that have fallen to the ground in the business' orchard off North Valley Road.

Michael Severeid, chief financial officer for Willamette Hazelnut Growers and manager at Newberg-based Flying Feather Orchards, began harvesting during the last week of September. That's a bit earlier than usual, he said, and is in part due to the conditions of the season. There needs to be permissible weather to pick and the nuts need to willingly drop off the tree before harvesting can begin.

It's also dependent on the type of hazelnuts being harvested.

"We have early and late varieties, so we end up harvesting for quite a while," he said.

So far, this year has been marked by several key differentiators compared with previous years. The harvest began three weeks later than the past two years, Severeid said, and the crop is smaller compared with last year.

A forecast from the National Agricultural Statistics Service, part of the U.S. Department of Agriculture, estimates the 2017 Oregon hazelnut crop is down 18 percent from last year.

But the quality appears to be an improvement over 2016, Severeid said, with a higher number of sellable kernels based on crack tests performed during the harvest.

"The edible portion doesn't have insect damage or discoloration or mold or anything like that," he said. "There is a higher percentage of good product in this year's crop."

The USDA analyzed hazelnuts in a lab and found 88.1 percent were good nuts. Large nuts were 49 percent of the good quality samples, while the largest category, "jumbo" nuts, made up 28 percent.

GARY ALLEN - Hazelnuts, or filberts as they are know to many locally, have been raised in the Newberg area for nearly a century and remain a major cash crop in the Yamhill County economy.

Price and yield shifts

This year is also marked by a soft hazelnut market on a wider scale. The global industry is coming off three years of very high prices and that trend has driven a price correction this year. The lower prices are also attributable to a larger crop in Turkey, the world's primary hazelnut producer. The country has produced varying sized crops in the past few years, and this year its output is high.

It's too early to pinpoint the exact harvest volume this season, but the 2016 numbers provide a point of reference and the USDA has estimated tonnage for the current harvest. Last year saw 44,000 tons harvested in Oregon, up from 31,000 the year before. The forecast estimates about 36,000 tons will be harvested in the current season.

The fluctuations are to be expected: Severeid explained that trees tend not to produce large crops consistently, leading to ups and downs from year to year. The past couple years have also seen significantly more damage from Eastern Filbert Blight, a fungal infection that takes time to show itself and leads to lower crop yields.

The disease kills trees' branches and growers will often either remove those branches or remove affected orchards altogether. Alternatively, growers can take no action, which leads the infection to kill productive tissue.

"We had a couple of wet springs a few years back and wet springtime is a prime condition for blight to spread," Severeid said.

Industry on the rise

Oregon's hazelnut industry is growing substantially. The industry has more than doubled in the past seven years, Severeid said, and he estimated the number of planted acres has likely tripled.

From 2014 to 2016 alone, the bearing acreage of hazelnut orchards grew from 30,000 to 37,000 acres. The USDA valued the 2016 crop production at nearly $119 million.

For many local growers, that's been a welcome development. In some ways, Oregon's industry has been too small to be a player in the market, not always able to offer a consistent supply to large food companies.

More orchards means more supply, and access to the larger buyers.

"The industry is excited to have more acreage," Severeid said.

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