What opportunities do hazelnuts offer farmers?

Hazelnuts are a native crop in the UK, historically grown in Kent for an inshell or local fresh market. While this sector is extremely niche, they are also a global commodity with more than 1m tons produced annually. 

Seventy percent of global production comes from Turkey, with the remainder split between Italy, Spain, Chile and the USA.

UK farming is at a critical moment, with geopolitical instability threatening the profitable production of cereals. Policy instability makes it difficult to plan farm businesses, and climate instability threatens farm output. 

Hazelnuts have the potential to offer a high-value crop, with low labour requirements and good yields in a changing climate. 

In the past decade, the hazelnut market has changed. Many of the main producer countries have had significant productivity challenges caused by seasonal uncertainty and changes in climate. 

Spain, which has more than 10,000ha, has not had enough chill hours to trigger flowers blooming for the past six years. This has led to the national average yield dropping from 2.2t/ha to 0.8t/ha. 

Italy has had similar issues with pollination, caused by changing climates and increased pest pressure, dropping yields by up to 40%. This has put pressure on Turkish production, which was down nearly 40% from 750,000t to closer to 450,000t – also due to climate instability. 

Paired with an increasing demand for hazelnuts of around 1.2m tons annually, this has caused prices to surge continually over the past five years, with no sign of consistent balance in supply.

They are non-perishable like cereals and enjoy a simple specification basis, which is primarily size, but they require the close care and attention of top fruit – with margins competing with top fruit too.

However, not all hazelnuts are equal. Market specification, and therefore value, is based on various factors – the most important of which is size. 

Seventy percent of the world market is for 11–13mm nuts, 25% for 14–16mm and the remainder for 17mm+. This is because the industry is driven by the confectionary market which prefers smaller nuts for their products. 

Certain varieties in those size brackets command premiums for flavour profile or kernel to shell ratio for example.

The hazelnut tree's root system is shallow – below 30cm – so keeping the ground around the trees clear is vital in the early years for good establishment. They are typically planted in 6m by 3m rows, totalling around 555 trees per ha.

A farmer should budget costs of up to £10,000/ha to establish an orchard with irrigation, which is applied through drip lines that also act as precision application for nutrition, and appropriate fencing to protect against deer. 

This is a significant investment given the time taken for the crop to reach mature yield.

• 25% in year 5 
• 50% in year 6 and 
• mature yield from year 7 onwards. 

Despite this, many growers have not opted for grant funding through Sustainable Funding Incentive agroforestry due to the restrictive nature of the stipulations attached to them, such as the limit of trees per ha and diversity of trees, which affect long-term viability of the orchards.

By adopting optimal varieties and practices, a farmer may expect to yield up to 3.5t/ha, with a ton of hazelnuts currently trading at more than £4,000. Maximising yield and minimising costs could lead to earnings before interest, taxes, depreciation and amortisation of more than £5,000ha.

In the UK, it is unlikely that a single farm could initially facilitate this scale of growth – but through collaboration it is possible, with lower individual risk to growers. 

The British Hazelnut Association was set up this year to target the 11–13mm hazelnut market. The association has, assisted by Nuffield scholarship research, sought to understand global best practice to optimise yield potential, market size, agronomy and orchard design. 

This will help UK farmers capitalise on the global market insecurity and create cost-of-production parity between UK farms and major international producers.

The UK hazelnut industry is just beginning and requires ambitious farmers ready to solve problems to make it a reality. The association wants to work with farmers to standardise growing practices and varietal choices, as well as collaborating to ensure the right quantity of the right product goes to market at the right price.