Hazelnuts offer a crop option

With improved genetics just around the corner, hybrid hazelnuts could supplement farm income.

A fourth-generation dairy farmer from Ladysmith, Wisconsin, Evan Hillan has experienced firsthand dramatic swings in farm prices. Seeking a way to take the bite out of the downswing, Hillan looked for specialty crops that might diversify farm income.

Growing hazelnuts is his choice. “I looked at growing hemp and ginseng, as well,” he says.

Hazelnuts won out because, for one thing, the labor needs seemed most compatible with the family’s work of dairying and growing 1,400 acres of corn, soybeans, alfalfa, winter wheat, and a rye cover crop for forage. Hillan farms with his parents, Eric and Carol Hillan.

“There’s also a growing demand for hazelnuts worldwide,” he says.

Hillan started cautiously; he planted 525 hazelnut seedlings in the spring of 2019. He plans to expand the plantings annually as he gains experience in growing and eventually harvesting hazelnuts. “I’d rather make a small mistake than a big one,” he says.

To secure a future for marketing nuts when his plants begin bearing in three to six years, Hillan joined the American Hazelnut Company based in Gays Mills, Wisconsin. Launched by 12 growers in 2015, the company buys nuts from its members and then processes them into a range of products to sell online as well as in 60 stores in Minnesota, Wisconsin, and Illinois. Products include roasted nuts, gluten-free flour, and a heart-healthy oil.

An Eco-Friendly Alternative

By and large, the American Hazelnut Company was begun by hobby growers. 

“Many of our members were drawn to growing hazelnuts because they were looking for an eco-friendly alternative for growing crops on land better suited to perennials than annual crops,” says general manager and member-grower Brad Niemcek. “Increasingly, we’re seeing interest from prospective growers looking for commercial opportunities in growing hazelnuts.”

The company is an offshoot of the Upper Midwest Hazelnut Development Initiative (UMHDI), founded in 2007 by the University of Minnesota and the University of Wisconsin.

“The grower-owned company is made up of small-scale operators working with undeveloped seedling germplasm. It is our strategy to develop a prototype production and marketing system that could provide a model for larger commercial production,” says Don Wyse, a University of Minnesota (UM) researcher who supervises the UMHDI.

“We have a vision of farmers growing hazelnuts as an alternative crop that can diversify income as well as protect land and water,” says UM researcher Lois Braun, coleader of the UMHDI.

The research focuses on hazelnut hybrids, which are shrubs that can reach heights of 12 to 14 feet. Their structure and deep, fibrous roots make them candidates for windbreaks and conservation plantings.

“They’re very effective in living snow fences and windbreaks, where you need shorter-stature shrubs in front of taller trees to filter the wind,” Braun says. “When hazelnuts are planted on the contour, their deep, fibrous roots help prevent soil erosion. Their root systems might also prevent nutrient leaching into groundwater when hazelnuts are planted in wellhead protection areas and riparian buffer zones.”

Elusive Profits

La Crosse, Wisconsin, grower Mary Hovel had conservation in mind when she planted hazelnuts in 2011. Hovel planted the hazelnuts along with blueberries and evergreen trees on 6 acres of a hilly 40-acre field.

“I wanted to establish woody agriculture crops so that the land wouldn’t be tilled,” she says. “The hazelnuts started producing in year six, and this fall, their production has been amazing.”

As a member of the American Hazelnut Company, Hovel sells her nuts to the company. However, she – like other company members – struggles to realize a profit from her crop at this stage of the industry’s development.

“None of our growers is reaping a profit because of excessively variable germplasm quality combined with high processing costs that are due partly to this variable germplasm,” Wyse says. “Addressing these challenges are two of the objectives of our research, along with developing growing and postharvest handling recommendations.”

UMHDI’s goal is to develop hazelnut germplasm that is acclimated to the growing conditions of the Upper Midwest and with the predictable performance that could support profitable commercialized production.

Hybrid hazelnuts – native hazelnuts crossed with European hazelnuts – are the heart of their work. “The global hazelnut industry is based on European hazelnuts,” Braun says. “But the currently available cultivars of European hazelnut are not reliably hardy in the Upper Midwest.”

The American hazelnut, which is native to the region, is both winter hardy and disease resistant. But its nuts are too small and thick shelled to be commercially viable.

“The purpose of the hybrid is to capture the winter hardiness and disease resistance of the native and combine it with the large nut size and shell-ability of the European hazelnut,” Braun says. “However, a high level of variability among these hybrid seedlings has made it difficult for producers to make money growing them commercially as a crop. Growers are waiting for better and more uniform plants.”

Marketing Will Fall into Place

The UMHDI researchers started by working with existing growers “to identify their best seedlings and evaluate copies of them in replicated performance trials,” Braun says. “The top 12 or so of these seedlings are now being propagated through tissue culture, and we hope they will be available to growers as cultivars in a year or two.”

As improved hybrid genetics begin supporting predictable commercial production, Braun believes marketing will fall into place.

“When I offer hazelnuts to guests as a snack, they can’t keep their hands out of the bowl,” she says.

A Growing System

Alley cropping is a production system favored among hazelnut growers. The hazelnuts are planted in hedgerows spaced 12 or more feet apart. Other crops can be grown between the rows of bushes until the hazelnuts grow to fill the space.

“The alleys can be planted with crops like clover and even vegetable crops,” says Braun. “There’s potential, too, to incorporate animal production systems within the alleys.”

Start-up costs are significant. “Nurseries charge from $3 to $5 for bare-root dormant seedlings,” Braun says. Given a 12-foot row spacing and 4-foot plant spacing, an acre accommodates 908 plants.

Hazelnuts start producing in three to six years. Harvesting of the nuts can be done by hand or by machine. Some growers presently use mechanical blueberry pickers. Researchers are evaluating specialized equipment for harvesting. Postharvest husking equipment is also required.

“The best yields that have been observed from unimproved seedling material were just shy of 1,800 pounds of in-shell nuts per acre in year eight, whereas UMHDI anticipates that yields of 2,200 pounds of in-shell nuts per acre will be possible with the new plant material being developed,” Braun says.

In a 2017 economic analysis, UMHDI coleader and University of Wisconsin Extension woody crop specialist Jason Fischbach writes, “Once the plantings mature, annual net income is estimated at $3,400 an acre in low-yield years and up to $4,200 per acre in high-yield years.”

The analysis assumes an in-shell price for nuts of $2 per pound, when sold to a grower-owned processing company.

“As with other woody perennial crops, there is significant profit potential for hazelnuts in the Upper Midwest,” he says, “but the establishment, working capital, and opportunity costs are substantial.”

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