Category: business

By Murray Redpath

HGA newsletter, February 2009

The New Zealand hazelnut industry is steadily establishing itself as an economically viable horticultural industry. With over 400 hectares planted, the increase in hazelnut production over the coming years will enable the existing cracking plants to take advantage of the expanding market for nuts. This market expansion is being led by research that is showing the health benefits of including nuts as a daily part of one’s diet. Research is continuing to prove that the nut oils are heart friendly, rapidly lowering levels of bad cholesterol, and recent research is indicating that they may also be useful in preventing diabetes.

The expansion of hazel growing out of the main Canterbury area has indicated the potential for hazelnut production in many areas that are now dominated by livestock production. In recent years the dairy boom has made it difficult for other land uses to attract attention but there is potential for a significant hazelnut industry in the sheltered, moister areas of South Canterbury, the lower Waitaki, and coastal Otago. Examination of new plantings and old stands indicate that the best sites have growth rates as good as in the main hazelnut producing areas overseas. Compared to dairying or intensive livestock production, hazel growing has lower total water use, no effluent disposal costs, and lower energy input costs. Nuts are machine harvested so seasonal labour requirements are not an issue.

The majority of hazels planted in New Zealand are the Whiteheart variety, selected for its high quality kernel. Grower success with this variety has been mixed, with many experiencing poor yields and high losses of young plants in some soils. The Hazelnut Growers Association of NZ (HGANZ) and the NZ Tree Crops Association have been working to identify the causes of these problems, running field days on pruning, orchard management, and testing young trees for disease. Poor pollination has been identified as the probable cause of poor yields and assistance from the Sustainable Farming Fund is enabling us to provide accurate advice to growers through a series of workshops in June of this year.

The Oregon hazelnut industry is a highly profitable horticultural industry concentrated on the high quality soils of the Willamette Valley. With returns of about $US7000 per hectare over cash costs, hazelnut production competes well with other land uses. Production is concentrated in the northern part of the valley between Salem and Portland, an area with large areas of grass seed cropping, berry growing, ornamental tree nurseries and wine grapes, especially pinot noir. Having watched the changes in the Oregon industry over the last 15 years, I had the chance to examine it during a visit in August/September of 2008 and see if there were lessons for the NZ industry.

The Oregon hazelnut industry has always been based on providing high quality nuts for the world inshell nut market. Fifteen years ago the traditional in-shell markets (Europe and domestic US consumption) were declining and the focus for hazelnut production was turning to the dominant kernel market. The situation has changed with the rise of China as a dominant economic force and about 50% of the total US in-shell hazel production now goes to China and Vietnam, often with prices negotiated and contracted prior to harvest. Processing plants in Oregon are keen to promote extra hazelnut production.

Both of the preferred in-shell hazel varieties, Barcelona and Ennis, are susceptible to Eastern Filbert Blight, a disease that has been spreading through the Willamette Valley since the 1980’s. This has restrained new plantings as growers wait for EFB-resistant varieties to emerge from the Oregon State University breeding programme. Recent years have seen resistant varieties emerge for the kernel trade but the first EFB resistant in-shell variety was not released until January this year. Oregon growers have a huge replanting task. Larger growers that we visited are replanting 10,000 trees per year.

The markets that the Oregon industry is supplying would be open to New Zealand growers if they had the right varieties. Good quality Barcelona and Ennis nuts are already being grown in Marlborough but quantities are not yet sufficient to fill local market requirements. The opportunity exists to expand our hazelnut plantings to take advantage of profitable markets for healthy food and growth in Asian economies.