Growing a crop of hazelnuts is not without its challenges, both from an agronomic and financial perspective. Locating the correct site is key to success, soil pH of 6.5-7.5 is preferred and trees thrive on well-drained loams with high organic matter.
It is recommended to have at least four varieties allowing for cross pollination, differences in characteristics and variation in harvest maturity dates.
Tree layout is another important consideration, projects often begin with 600-700 plants/ ha on a 5x3m basis, providing an appropriate density for 10-12 years. Removing one or two trees as they approach maturity moving to a 5x6m layout is a common approach. The commercial operations Brown & Co have been involved in use an array of mechanical techniques to plant, maintain and harvest the crop alongside a drip irrigation and fertigation system.
The anticipated harvest window for Europe is 10th August to 15th October, a newly planted hazelnut tree does not start producing a nut crop until the tree becomes established. A first hazelnut crop can be expected within two to five years of planting the tree. The initial crops are usually small, but as the tree matures, the crops increase in size (see graph above).
Due to the nature of the crop there are financial challenges, particularly when considering the substantial upfront investment as trees do not begin to generate full revenue until years 8-10. A crops commercial life is expected to be 30+ years therefore any investor considering tree nut production must view it as a long term project.
Brown & Co International have recently completed due diligence and financial models for such investments indicating it is possible to achieve an IRR of 10-12% targeting a payback period of 12years. This is highly dependent on contract pricing negotiated with the processor. There are several pricing mechanisms used by different processors which focus on both quality parameters and varietal differences.