Opportunities in forestry: Hazelnuts

Hazelnut products comprise a diverse and growing global industry. Recent regional developments represent an opportunity for Upper Peninsula growers to break into this $34-billion-dollar industry.

A pile of hazelnuts

In the fall of 2014, the price of Nutella – the popular chocolate spread – jumped 60%. Inclement spring weather in Turkey damaged the hazelnut crop, a significant input to the Australian Nutella product; which then hit the wallet of the American consumer. This story signals an odd, interconnected world and a market opportunity.

Turkey is home to 70% of the world’s production of hazelnut, with a quarter of global supply coming from one town specifically: Ordu. There is industry interest in diversifying this supply chain as global demand for the nut continues to increase. The Upper Midwest – researchers note – is uniquely positioned to fill this need and enter the $34 billion hazelnut market. Here are the basics on how this is relevant to the Upper Peninsula of Michigan:

What are hazelnuts?

The hazelnut tree is found around the world in a few different species, all of which produce a slightly different form of the same sweet, nutritious nut. The European hazel is the dominant commercial variety because it has a thinner shell and is of a higher quality with a larger size. The American hazel – as outlined in ‘Hybrid Hazelnuts: An Agroforestry Opportunity’ – has various relative strengths, but is more difficult to process and bring to commercial market.

What are hazelnuts used for?

Hazelnuts can be consumed raw, but also have several value-added applications. Hazelnut oil is a superior cooking medium. The remaining meal can be used as a nutritious livestock feed. The hazelnut can be transformed into various retail food products including: coffee creamer, hazelnut butter and a non-traditional flour.

What are the difficulties in this industry?

There are headwinds to the establishment of this industry in the Upper Peninsula. The best practices for harvesting and processing the American hazelnut, as this is a newer crop, are less defined. The Upper Midwest commercial supply chain – processors, distributors and retailers – that is required to bring a finished product to the consumer is immature. Oregon is by far the dominant producer of hazelnut in the US.

bar-candy-chocolate-1693027What’s changing?

The Upper Midwest Hazelnut Development Initiative – a partnership formed by the University of Wisconsin and the University of Minnesota – is working with 150 growers in Wisconsin, Minnesota and Iowa to select and breed American hazelnut seedlings best suited to commercial production. Wisconsin Public Radio recently detailed an emerging commercial supply chain in Northern Wisconsin. The Hulings Rice Food Center in Ashland, WI acquired a machine designed to quickly de-shell hazelnuts, an important processing step. The American Hazelnut Company partners with members to access value-added processing, marketing and coordinated distribution. This is not yet a mature sector, but signs point to a growing industry.  

How can I integrate this into my production system?

The USDA National Agroforestry Center outlines innovative techniques to maximize the financial and ecosystem benefits of the Hazelnut on the farm. The Hazelnut tree, in a riparian setting, can stabilize the soil while helping to control flooding. It can also function as an income-producing windbreak. Marginal land is a great location to try planting. Areas of the farm unfit for traditional crops, for example pivot irrigation corners or high topography areas, can be a prime location for the resilient Hazelnut. Orchard planting is another option.

Who can help?

University of Wisconsin Extension – and the several organizations listed in this article – can serve as useful resources when considering Hazelnut production. Success in this sector requires production knowledge, but perhaps more significantly skill in business development. To access expertise on the retail food sector, niche product supply chains and communicating through marketing, consider utilizing the MSU Product Center. The MSU Product Center is an organization that brings together on-campus expertise in the sectors of food, agriculture, forestry and natural resources to help entrepreneurs define and launch innovative products. Field-based innovation counselors advise entrepreneurs on business planning, regulatory requirements and product development needs. To access business development assistance, select the ‘request counseling’ tab on the MSU Product Center website or call 517-432-8750.

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