October 16, 2015
CapitalPress.com
3
Hazelnut crop smaller than expected Hazelnut dispute
High quality, strong
demand, dry nuts
provide upside
raises pricing
questions
By MATEUSZ PERKOWSKI
Capital Press
Oregon’s hazelnut crop
isn’t living up to expecta-
tions in terms of quantity,
but high quality and strong
demand are providing farm-
ers with an upside.
The state was initially
forecast to produce about
39,000 tons of hazelnuts in
2015, but with the harvest
winding down, it looks as
if the crop may come in be-
low 37,000 tons, said Mike
Klein, executive director of
the Oregon Hazelnut Mar-
keting Board.
“It looks to be short,” he
said.
Multiple factors contrib-
ute to hazelnut yields, such
as weather during the win-
ter pollination season, Klein
said.
This past winter was mild,
which may have caused
flowers to bloom either too
early or too late for optimum
pollination, he said.
When new orchards are
planted, farmers now use
more than one “polleniz-
er” variety to hedge against
such an outcome, but older
orchards often depend on a
single variety for pollina-
tion, Klein said.
Eastern filbert blight, a
fungal pathogen that affects
hazelnuts, has also taken a
toll on older orchards that
aren’t resistant to the dis-
ease, said Tim Newkirk,
CEO of Willamette Hazelnut
Growers.
Increased prevalence of
the disease also causes farm-
ers to prune trees more ag-
gressively, which decreases
their capacity to produce
nuts, he said. “I think it’s
a combination of a lot of
things.”
Newkirk said it was un-
likely that this summer’s dry
conditions contributed much
to the reduced crop, since
there isn’t a large amount
of nut shrinkage that’s usu-
ally associated with drought
stress.
Estate of deceased
businessman
demands additional
payment
By MATEUSZ PERKOWSKI
Capital Press
Photos by Mateusz Perkowski/Capital Press
Workers inspect hazelnuts at the Willamette Hazelnut Growers facility near Newberg, Ore. The Ore-
gon industry expects to see a smaller crop than initially forecast, but quality and demand are good.
Hazelnuts are washed at the Willamette Hazelnut Growers facility
near Newberg, Ore. The Oregon industry expects to see a smaller
crop than initially forecast, but quality and demand are good.
“Hazelnuts are a pretty
hardy tree,” he said. “The
quality looks really, really
good.”
The dry weather has sped
up the maturation of hazel-
nuts, with the harvest occur-
ring several weeks ahead of
the normal schedule.
While the harvest typ-
ically ends in November,
this year it’s expected to be
done by mid-October, said
Newkirk. “Usually, that’s
the heart of the battle there.”
Because of the lack of
rain, hazelnuts are also com-
ing in drier than average,
which saves growers from
paying as much for drying
services when they bring
their crop to receiving sta-
tions, said Klein.
Hazelnuts that have
been rained upon gener-
ally consist of 20 percent
moisture at harvest, but
this year they’re in the low
teens, or even the 10-11 per-
cent moisture range, said
Newkirk.
Drier nuts provide a food
safety benefit, as bacteria
and mold are likely to fes-
ter in moist conditions, said
Jonathan Thompson, CEO
of the Northwest Hazelnut
Co.
“They’re harvested off
the ground, so the drier, the
better,” he said.
The initial field price
that processors are paying
farmers for hazelnuts is set
at $1.22 per pound, which
is the second-highest on re-
cord, said Klein.
Last year’s initial field
price of $1.81 per pound
was an anomaly caused by
significantly lower yields in
Turkey, the foremost hazel-
nut producer, he said. “That
was the result of the extreme
shortage of hazelnuts on the
world market.”
Hazelnuts are a good
long-term investment due to
the strong, stable market for
the crop, said Larry George,
who owns George Packing
Co. and the Northwest Ha-
zelnut Co.
Oregon is the largest ha-
zelnut-growing state in the
U.S., but produces roughly
5 percent of the global crop,
he said.
Meanwhile, global con-
sumption of hazelnuts is
rising 6 percent annually,
George said. “The consump-
tion is going up by the size
of an Oregon crop every
year.”
A cooperative of Oregon
hazelnut farmers is accused
of violating a pricing con-
tract with a deceased avia-
tion and agricultural entre-
preneur.
The estate of Delford
Smith, founder of the bank-
rupt Evergreen Aviation
and Evergreen Agricultural
Enterprises, filed a lawsuit
against the Hazelnut Grow-
ers of Oregon cooperative
seeking $150,000 in addi-
tional payments for hazel-
nuts delivered in 2013.
The complaint alleges
that Smith, who died in
2014, agreed to sell 1 million
pounds of hazelnuts to the
cooperative at a per-pound
price that was 35 cents
above the rate established by
the Hazelnut Growers Bar-
gaining Association, which
negotiates prices between
farmers and major proces-
sors.
The initial field price
was set at $1.15 per pound
in 2013, resulting in a pay-
ment of $1.50 to Smith, the
lawsuit, filed in Multnomah
County Circuit Court, said.
However, favorable mar-
ket conditions led to the
price increasing to $1.30 per
pound in March 2014, which
means Smith should have
received $1.65 per pound,
according to the complaint.
The cooperative’s CEO,
Jeff Fox, said he could not
discuss the matter and re-
ferred questions to attorney
Brandy Sargent, who told
Capital Press she expects the
dispute to be
resolved soon.
“This matter
is pending set-
tlement right
now,” Sargent
said, declin-
ing to provide
Jeff Fox
specifics about
possible terms.
Even if the controversy
between the cooperative and
Smith is straightened out,
the lawsuit has nonetheless
raised questions about the
cooperative’s pricing deal
with the entrepreneur.
Processors who enter
into deals with the Hazelnut
Growers Bargaining Asso-
ciation are prohibited from
paying certain farmers a
more favorable rate than the
established price, said Bruce
Chapin, chairman of the Or-
egon Hazelnut Commission.
“They don’t make special
deals, so everybody is paid
the same,” he said.
Not every processor is
bound by the agreement, but
most of the major ones agree
to the contract, Chapin said.
If a processor who con-
tracts with the bargaining
association is later found
to provide a certain grower
with special terms, the com-
pany would be required to
compensate other farmers,
said Doug Olsen, the group’s
president.
“If they end up paying
more than what we agreed
on, then they owe growers
in the association the same
amount,” he said.
Given the contract dis-
pute, however, it’s unclear
what HGO’s actual payment
to Smith’s estate will ulti-
mately be.
There’s also uncertainty
about HGO’s obligations to
growers who belong to the
association, since only the
cooperative’s Westnut di-
vision is a signatory to the
contract.
Agriculture
secretary fields
wide-ranging
questions
By DON JENKINS
Capital Press
Don Jenkins/Capital Press
U.S. Agriculture Secretary Tom Vilsack, right, laughs after being
presented Cougar Gold cheese by Washington State University
Acting President Dan Bernado Oct. 13 at WSU’s research center
in Mount Vernon. U.S. Rep. Suzan DelBene, D-Medina, stands be-
tween Vilsack and Bernado. Speaking to about 200 people, Vilsack
praised the Trans-Pacific Partnership and criticized Congress for
squeezing his department’s budget.
some cases immediately and
in other cases gradually over
many years.
Falling tariffs will help
U.S. producers sell to Asian
countries, drawn to America’s
safe, diverse, affordable and
high-quality farm goods, he
said.
“Those middle-class con-
sumers are very interested in
buying American agricultural
products,” he said. “It’s a de-
pendable market opening for
us.”
The trade agreement will
simplify organic certifications
and demand countries sci-
entifically justify trade bans
based on phytosanitary con-
cerns, he said.
Vilsack defended the pact
42-1/#4
MOUNT
VERNON,
Wash. — The Trans-Pacif-
ic Partnership will benefit
U.S. farmers by prying open
foreign markets and putting
“immense pressure” on China
to match America’s high stan-
dards, Agriculture Secretary
Tom Vilsack said Tuesday at a
forum hosted by Washington
State University.
“I’m confident in saying
American agriculture is a ben-
eficiary of this agreement,”
Vilsack told about 200 people
crowded into a conference
room at WSU’s research cen-
ter in the crop-diverse Skagit
Valley.
Vilsack touted the TPP
during a 80-minute ques-
tion-and-answer session mod-
erated by WSU Acting Presi-
dent Dan Bernardo.
Vilsak was joined on stage
by U.S. Rep. Suzan DelBene,
D-Medina, who broke from
most House Democrats and
voted in June to put TPP to an
up-or-down vote in Congress.
The 12-nation pact runs
1,000 pages and will be made
public in 20 to 25 days, said
Vilsack, who’s been touring
the country to promote the
deal.
China is not part of the
agreement, though other
leading and emerging Pacif-
ic Rim countries are. Vilsack
said TPP would balance Chi-
na’s regional influence and
over time lean on China to
adopt the pact’s free-trade
norms.
Pending the release of
TPP’s text, the U.S. Depart-
ment of Agriculture has pre-
sented charts broadly sum-
marizing how tariffs will be
reduced or eliminated, in
from critics who say the
deal should have prohibit-
ed currency manipulation.
Monetary policies should be
addressed by financial agree-
ments, he said. Including
currency issues in trade pacts
could hinder the ability of
countries, including the U.S.,
to respond to recessions, he
said.
The pact has come under
attack from environmental or-
ganizations and worker-rights
groups. Vilsack said TPP will
facilitate talks on those issues
with countries such as Viet-
nam. “It’s not easy having a
discussion with a communist
country on labor and the envi-
ronment.”
ROP-32-52-2/#17
Vislsack: Farmers to like trade pact, when they see it
42-2/#5