September 29, 2017
CapitalPress.com
3
Oregon hazelnut growers face small crop, lower prices
Stalled negotiations
may force
mediation,
arbitration
By MATEUSZ PERKOWSKI
Capital Press
Oregon’s hazelnut industry
appears headed for turbulence
as harvest begins, with do-
mestic production projected
to drop while global factors
may weigh down prices.
Meanwhile, packers and
growers haven’t been able to
agree on an initial price for
the crop, potentially requiring
them to undergo mediation
and arbitration.
Hazelnut production in Or-
egon — the foremost domes-
tic producer — is forecast to
be 36,000 tons in 2017, down
18 percent from last year, ac-
cording to USDA’s National
Agricultural Statistics Ser-
vice.
Meanwhile, the global ha-
Mateusz Perkowski/Capital Press
Farmer Bruce Chapin observes a sweeper prepare hazelnuts for har-
vest at his orchard near Salem, Ore. Various factors have contributed
to turbulence in the hazelnut market as the 2017 harvest begins.
zelnut crop is expected to in-
crease 15 percent over 2016,
said Terry Ross, executive di-
rector of the Hazelnut Grow-
ers Bargaining Association,
which negotiates with packers
on behalf of growers.
“There’s downward pres-
sure on the kernel market,” he
said.
The Chinese New Year, a
major holiday for in-shell ha-
zelnut consumption, will be-
gin late next year in mid-Feb-
ruary, allowing buyers in
China to procrastinate with
their purchases, Ross said.
Generally, such delayed
buying doesn’t bode well for
strong in-shell hazelnut pric-
es, he said.
Another unknown is how
much increased Chinese ha-
zelnut production will affect
its appetite for Oregon’s crop,
Ross said. “We don’t how big
of an impact that’s going to
have.”
Conflicting views about
supply and demand in the
hazelnut market have stalled
efforts among growers and
packers to agree on an initial
price, Ross said.
Unless the deadlock is
soon broken, it’s likely the
parties will enter into medi-
ation, he said. If that process
fails, they’ll present their ev-
idence to an arbitrator, who
will then determine the price.
The current impasse is
“very unusual” in Oregon’s
hazelnut industry, which
hasn’t been forced to enter
mediation or arbitration for
roughly 35 to 40 years, Ross
said.
“It could prolong (arriv-
ing at an initial price) by two
weeks to a month, maybe
more,” he said.
The diverging opinions on
hazelnut market conditions
Oregon farmer faces big
penalty for planting project
By ERIC MORTENSON
Capital Press
By MATEUSZ PERKOWSKI
Capital Press
Mateusz Perkowski/Capital Press
Farmer Kelly Sampson stands near Milk Creek, a tributary of the Molalla River, which runs through his
80-acre property near Canby, Ore. He faces a $6,000 fine for allegedly violating state fill-removal law
by planting willows into hay bales and other materials placed along the stream.
ordinary high water mark, she
said.
“I think his intent was
probably to plant some wil-
low cuttings, but he needed a
permit to do that,” said War-
ner-Dickason.
Sampson said he’s dis-
appointed by the potential
enforcement action because
the DSL’s website states that
habitat restoration projects
are exempt from fill-removal
laws.
The agency doesn’t make
it sufficiently clear that a per-
mit may still be required un-
der certain circumstances, he
said.
“I feel like I’m getting
hustled here,” Sampson said.
“I’m planting willows and it’s
like you’re talking to a drug
dealer here.”
Vegetation along stream-
banks is often seen as having
a positive impact on streams,
since it cools the water to the
benefit of sensitive fish.
However, whenever you’re
working in or near a stream,
it’s worthwhile to seek guid-
ance from the Oregon Depart-
ment of Agriculture, the local
soil and water conservation
district, or an Oregon State
University Extension agent,
said John Byers, manager
of ODA’s agricultural water
quality program.
“Natural resource agencies
want to help citizens do the
right thing,” Byers said.
For example, if the ODA
requires a landowner to rec-
tify a water quality problem
with vegetation, the agency
will develop a planting plan,
he said.
“What should you grow
here, and what should that
look like,” Byers said of the
plans.
Using hay bales or oth-
that trend and would like to
see that continue,” he said.
As for the 18 percent de-
crease in Oregon’s hazelnut
production, farmers attribute
the change to “our normal ups
and downs,” said Jeff New-
ton, a grower near Amity, Ore.
Growth was hindered in
spring by cold, wet weather,
which impaired flower reten-
tion and slowed the develop-
ment of nuts, he said.
Periods of high heat during
summer caused moisture
stress, which also brought
yields down, said Bruce
Chapin, a farmer near Salem,
Ore.
A “blow up” of eastern
filbert blight, a fungal dis-
ease, two years ago prompted
heavy pruning in hazelnut or-
chards, which has temporarily
lowered production as well,
he said.
Despite the expansion of
hazelnut orchards in recent
years, those young trees aren’t
yet mature enough to substan-
tially affect Oregon’s overall
production, Chapin said.
Wine in small batches works
fine for little vineyards
Placing materials
along stream
allegedly violated
fill-removal law
An Oregon farmer faces
a $6,000 penalty for plant-
ing willows into materials he
placed next to a stream, which
state regulators allege violat-
ed fill-removal laws.
Kelly Sampson, who
grows hay and nursery stock
on 80 acres near Canby, Ore.,
said he put hay bales onto
rocks next to the creek to re-
tain moisture for the young
trees.
“My goal here is to do
good things for fish,” he said.
Ordinarily,
landowners
don’t need a fill-removal per-
mit from the Oregon Depart-
ment of State Lands if they’re
adding or removing less than
50 cubic yards of material in a
waterway or wetland.
In this case, however, Milk
Creek — a tributary of the
Molalla River — is desig-
nated as “essential salmonid
habitat,” so any amount of
disturbance requires a permit,
according to the agency.
“Planting vegetation into a
bank doesn’t require a permit,
but when you add substrate,
you may need a permit,” said
Lori Warner-Dickason, field
operations manager for DSL.
A complaint received by
DSL indicates that Samp-
son placed hay bales as well
as “horse manure and barn
cleanout” below the creek’s
could be due to some packers
having more inventory left-
over from last year than nor-
mal, said Jeff Fox, CEO of the
Hazelnut Growers of Oregon
cooperative.
Last year, packers paid
an initial price of $1.18 per
pound of hazelnuts, and the
final price ended up at $1.24
per pound.
Fox said he expected a
similar initial price in 2017
but some packers are propos-
ing a per-pound price in the
range of 90 cents.
“We haven’t seen those
kinds of prices in about six
years,” he said.
Due to the large kernel
crop in Turkey, the world’s
predominant hazelnut grower,
a price reduction would help
domestic packers to be more
globally competitive, he said.
The push for a lower price
is unfortunate, though, since
rising prices have inspired Or-
egon farmers to invest heav-
ily in planting more hazelnut
trees recently, Fox said.
“I was really happy with
er materials may or may not
be appropriate in certain sit-
uations, but such decisions
should be made with the help
of a professional, he said.
“There are standard prac-
tices, standard protocols for
everything,” said Byers.
The Department of State
Lands receives roughly 100
complaints a year about po-
tential fill-removal law prob-
lems, with about half of those
ultimately determined to be
violations, said Warner-Dick-
ason.
“There’s very few viola-
tions that are intentional,” she
said.
Most violations pertain to
filling of wetlands that land-
owners didn’t realize were
classified as such, she said.
About 10 percent of the viola-
tions relate to placing rocks or
other materials along a stream
bank.
OREGON CITY — They’re
using fitted sheets this year to
cover their “punch down” vats
and keep fruit flies off the “re-
ally young” Leon Millot wine
beginning its fermentation
process. The advantage over
plastic coverings, co-owner Jan
Wallinder said, is that the bed-
sheets can be washed and used
again, of course.
That may sum up an over-
looked facet of Oregon’s
high-flying wine industry as
the 2017 grape harvest is un-
derway. For all the praise and
prestige accompanying the Pi-
not noir producers of Yamhill
County and elsewhere in the
Willamette Valley, smaller and
lesser-known vineyards are
chugging along just fine.
Wallinder and her husband,
Rob Webb, own and operate
Forest Edge Vineyard south of
Oregon City and about a half-
hour drive out of Southeast
Portland. They’re among 15
relatively small, independent
operations that make up the
Cascade Foothills Winegrow-
ers on the east side of the Wil-
lamette Valley.
Forest Edge produces an
average of about 500 cases a
year and sells at an on-site tast-
ing room, at farmers’ markets
and online. You won’t find
their wines at grocery stores,
but as Webb said, “It keeps the
two of us more than busy.”
For perspective, the Or-
egon Wine Board says the
state’s wineries are primarily
small to mid-sized family op-
erations, and about 70 percent
produce less than 5,000 cases a
year.
The Cascade Mountain
foothills is a slightly cooler
growing region than the op-
posite side of the Willamette
Valley, but producers such as
Webb and Wallinder — like
vintners in the Columbia Basin
and Southern Oregon — tweak
their operations to take advan-
tage of what they have.
Forest Edge grows Pinot
noir and Chardonnay grapes,
but also the unusual Leon
Millot variety, which produc-
es a lighter red wine. They
have some Gamay noir grapes
as well. They don’t make
$45-a-bottle Pinot noir. Most
of their wines sell for $11 to
$14, with a port-style dessert
wine going for $25. An $11
chilled wine that sold well over
the summer was Forest Mist, a
blush-like blend of Pinot noir
and Chardonnay that they don’t
make every year.
Wallinder and Webb
bought the property in 1984
and do most of the vineyard
and wine-making work them-
selves, including bottling and
labeling. They use a “minimal
prune” canopy management
system that probably costs
them some yield, but eases the
workload. “It works for us,”
Webb said. For many years
they’ve employed members
of an extended family — most
of whom have regular full-
time jobs or are students — to
help pick the grapes.
Webb is the winemak-
er. He relies on sugar levels,
called brix, plus pH tests and
his own taste buds, to know
when its time to pick.
“My approach is, science
on a need-to-know basis,” he
joked.
The couple have 45 acres,
most of it forested. Their
house is a geodesic dome,
they irrigate the grapes with
captured rainwater and gen-
erate enough electricity with
their solar system to sell it
back to the grid, and produce
more than they use.
Hop stocks continue to outrun demand
By DAN WHEAT
Capital Press
YAKIMA, Wash. — Even
before this fall’s harvest, U.S.
hop stocks are up substantially
from a year ago, reflective of an
oversupply that’s putting pres-
sure on dealers and growers.
Stocks were up 15 percent
at 98 million pounds on Sept.
1 versus 85 million pounds a
year ago, according to a report
released Sept. 20 by the USDA
National Agricultural Statistics
Service.
It is the largest percent-
age increase in inventory of
the four reports showing sup-
ply increases dating back to
March 1, 2016. The new report
shows dealers and growers
with 64 million pounds of hops
and brewers with 34 million
pounds.
“It’s actually a pretty good-
sized overage and it was expect-
ed. We knew craft (beer) was
slowing while aroma variety
hop acreage is still increasing,”
said Pete Mahony, director of
supply chain management and
purchasing for John I. Haas, a
major processor and grower in
Yakima.
Previous overages, years
ago, were high alpha commod-
ity varieties that keep for years,
he said. This year’s overage is
of aroma varieties for craft beer.
Aroma varieties need to be used
in a year or two, he said.
During the summer, 47
Hops of Yakima, a hop broker,
filed for Chapter 11 bankruptcy
protection to shield itself from
creditors while developing a
restructuring plan to pay more
than $7.4 million in debts and
remain operational.
Doug MacKinnon, com-
pany president, blamed the
bankruptcy on craft brewers
contracting for more hops than
they needed.
“There definitely will be
pressure on the entire supply
chain, whether growers or
dealers. And will there be oth-
er casualties? I don’t know,”
Mahony said. “Larger dealers
are pretty solid. We’ve lived
through these markets for
decades. Smaller ones may
struggle. It’s all about proper
management of inventories.
Aroma varieties are expensive
inventories.”
For years the proliferation
of small, craft breweries fueled
the demand for more aroma
hop varieties. While still grow-
ing, the rate of craft brewery
growth has slowed, resulting in
some breweries renegotiating
contracts that were based on
expectations of higher growth,
said Ann George, executive
director of Hop Growers of
America and the Washington
Hop Commission in Moxee.
That returns the hops to
dealer and grower inventories,
she said.
George said the U.S. pro-
duces more than 80 hop vari-
eties, and while there’s an ex-
cess supply of some, demand
for others is still growing.
“The key is re-balancing by
changing varieties in response
to new contracts,” she said.
It takes a couple of years to
bring new hops into full pro-
duction and for the past five
years the industry has been
trying to catch up to brewer
demand, she said.
“Now it appears hop acre-
age has exceeded current
brewer demand, so it will be
important to take the foot off
the gas pedal until brewer
demand catches up with hop
acreage,” she said.
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