A frost that damaged the hazelnut crop in Turkey might be a boon to growers in Oregon — at least in the short term — even as it hits Nutella-lovers' pocketbooks.
The extent of the damage isn't clear yet, but because Turkey supplies 70 percent of the world's supply, big hazelnut buyers — including the biggest, Nutella maker Ferrero — are scrambling to shore up their reserves.
And they'll probably look to Oregon, which produced $121 million worth of filberts last year. The state is the biggest (and basically the only) U.S. grower of hazelnuts, producing 99 percent of the country's crop.
"I think we'll start getting calls from manufacturers here domestically that we otherwise wouldn't get," said Jeff Fox, chief executive of Hazelnut Growers of Oregon, a growers cooperative. "The trick is, we have to be willing to supply it."
This year's crop estimates are due out later this month, but Michael Klein of the industry-funded Oregon Hazelnut Marketing Board said Oregon growers expect a "fairly good" crop this year.
The hazelnut industry here has already been ramping up to meet growing demand, particularly for hazelnut spreads like Nutella and export to China, where hazelnuts are popular during the Chinese New Year celebration. Over the last seven years, Klein said, the acreage devoted to growing hazelnuts in Oregon has grown by 50 percent.
Oregon growers have typically had trouble tapping into the domestic market for shelled hazelnuts, many of which are headed to food processors, Fox said. But a tough year for their Turkish competitors might offer a foothold if more growers choose to shell their hazelnuts and sell them that way.
The looming shortage has reportedly already caused a 60 percent spike in prices. Food bloggers are already speculating Nutella could raise its prices accordingly.
The spike in prices could be a short-term boost for Oregon growers who have a normal or better-than-average season, Klein said.
But Oregon is still only responsible for about 7 percent of the world's supply. Ultimately, growers fear, the shock could turn buyers off of hazelnuts altogether.
"If buyers that have been purchasing hazelnuts for a product are having difficulty finding a source of supply, they might turn to something else or reduce the percentage of hazelnuts used," he said. "That's always a concern we have."
