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The market for hazelnuts

Hazelnuts are a worldwide commodity, presently consumed largely as a luxury food. Most hazels are eaten mixed in chocolate candy, a marriage made in heaven. The demand for nuts that process well is always high. Some other present uses include in-shell nuts for the Christmas market, mixed nuts, "hazel butter", and premium salad oil. Hazel oil is very much like olive oil in its chemical make-up, with a light, pleasant, nutty taste.

Annual world hazelnut production is about 455,000 metric tons, a little more than that of almonds. Turkey produces 65 percent of hazels on the world market, Italy 20 percent, and the US 3 percent. Europe is currently the biggest consumer of hazelnuts. In the US, 98 percent of commercial production is in or near the Willamette Valley of Oregon, because that is the only region where the standard European varieties will thrive. The US produces only about 20% of its present consumption.

Historically the raw commodity price has fluctuated between 45 and over $1 per pound of dry, in-shell nuts, with an average price of about 85. Last year this price hit a new low of 35—it is unclear if this is a trend. The small grower can realize far more return from the crop if it can be sold retail, as a local specialty, or as a value-added product. Marketing co-ops are a sensible possibility, and one already exists in Michigan.

Potential for new products and expanded markets is very high. Basically, anything that can be done with a soybean could be done with a hazelnut, and more. No one familiar with hazel marketing doubts the ability of the market to absorb additional production, even without development of new products.

Hazels have not been commercialized in the Eastern US because the standard varieties are not cold hardy and are eventually killed by a disease called Eastern Filbert Blight (EFB), carried by the wild hazels. Our own tests have shown that the standard Oregon cultivars Royal, Ennis, and Butler all freeze out in zone 4. Originally, Oregon growers could ignore the disease problem, because until a few years ago, Oregon had no EFB; it is now a serious problem there.

Plantings intended for profitable production are now being made in Minnesota, Wisconsin, Nebraska, and Kansas, with substantial trial plantings in Iowa, Missouri, and the Dakotas. Smaller private trial plantings exist in most states not quarantined, and several Canadian provinces.

Next: Basic Hazel Info 5: Crop systems for Hybrid Hazels

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