Hazelnuts Wars

A bucolic 135-acre hazelnut orchard in Oregon’s Willamette Valley might seem an unlikely place for the U.S. trade clash with China to play out, but that is exactly what is happening now at Kirsch Family Farms in St. Paul, Oregon.

Farm owner and LMU alumna Brenda (Kirsch) Frketich ’06 is grappling with the current economic volleys between the nations. On top of tariffs in place for $50 billion in goods on both sides, the Trump administration announced a new round of tariffs on $200 billion in goods that went into effect earlier this week, on Sept. 24, with an additional $267 billion in goods possible in the future. The Chinese government retaliated with tariffs on $60 billion in U.S. exports. Caught in the middle are tasty, toasty brown hazelnuts, which face significant price fluctuation at the very time of year when they are about to be harvested.

There’s no doubt that the Chinese love hazelnuts — a staple as a snack nut and in cultural celebrations such as Chinese New Year. According to Frketich, China takes 70 percent of Oregon’s production of hazelnuts, and Oregon produces 99 percent of the hazelnuts in the U.S. But escalating tariffs will have an impact. There is already a 35 percent tax on hazelnut exports, and with the fluid situation, Frketich is not certain of the final tax that may be imposed on her crop when it’s ready for market in October. If taxes go higher, the field price she can get for pound of nuts will have to drop. What she does know for sure is that she has prepared her third-generation family farm to deal with turbulent economic and political changes using what she learned as an LMU business major in the College of Business Administration. Success, she says, takes a combination of diversification, efficiency and advocacy — all good lessons for other industries far afield from farming.

“Farming is such an incredibly risky business when I take into account all the things I can’t control, like Mother Nature, climate, currencies around the world and our own world market for our product,” Frketich says. “Those risks are always going to be difficult, and they keep me up at night. But we position ourselves through diversification in a cropping sense and in the companies we choose to work with based on their marketing focus, whether domestic or overseas.”

Yes, hazelnuts are a valuable, permanent crop at Kirsch Family Farms, but they are only a fraction of what Frketich grows on a total of 1,000 acres. She has a robust seed business, with grass seeds and seeds for vegetables, including radishes, Swiss chard and pumpkins. On top of that, Kirsch harvests green beans and peas for frozen use. Plus, growing crimson clover helps her reach the livestock food chain.

Frketich says the China tariff issue has people paying attention to hazelnuts. “We have a soapbox to stand on now. The world of farming is quite small, but we are dealing with worldwide issues.”

Frketich also targets sales diversification. “The challenges of selling overseas are not new, so we wanted to position ourselves less on China. We joined a cooperative, Hazelnut Growers of Oregon, which took a strong stance to work on developing opportunities in the domestic market. We are happy with how they are positioning hazelnuts in the domestic market, trying to break into Trader Joe’s and Costco.” Ultimately, the goal is broader distribution in the U.S. and better recognition of hazelnuts alongside the nut juggernauts of almonds and pistachios.

To get there, hazelnut farmers will have to maximize production and minimize costs. Frketich is doing just that — sowing efficiency right into her fields. Kirsch Family Farms operates with just four full-time staff, including Frketich and her husband, Matt. They temporarily hire just a few other workers each year for seasonal jobs. “We are a low-labor farm,” she says. “We make our cropping system work with under 10 employees. We are always trying to do more with less. As with most businesses, the higher efficiency, the better off you are at the end of the day.” This positioning also helps protect the farm from another highly charged political issue — immigration. “We are not getting the workers we used to. We are not sure if it’s the tightening at the border or people not wanting to work on farms, but the complex immigration issue is causing a shortage in labor, and the labor that is here is higher in price. This brings us back to the importance of being a low-labor, high-efficiency farm.”

Despite the challenges, hazelnut farming is growing in popularity, Frketich says, and more people are planting new trees, which take about four years to bear fruit. Research in Oregon has brought about better, healthier tree varieties and better agriculture management practices. “Our industry is producing more nuts than before,” she says. “Because of the additional acres moving forward, we are going to have a more consistent and larger supply.”

In this changing environment, Frketich emphasizes the importance of industry involvement. “The Oregon Farm Bureau is a huge advocate for us on political issues, and the Hazelnut Marketing Board supports us with market information and industry updates,” she says. Frketich participates in both organizations and testifies in the Oregon state capital multiple times a year when legislative issues affecting agriculture come up. She writes a blog (www.nuttygrass.com) that covers day-to-day life on the farm as well as industry issues. “Investing in the industry you are in is so important, and so is being present for the conversations. In Oregon, the feeling is that if the farmer comes to talk, it’s a lot different than if a staff person from the bureau is discussing the issue.”

Ongoing political and economic impacts don’t sink Frketich’s spirit. In fact, they contribute to her resolve to find the silver lining. “I’ve learned that even though the farming industry is always being questioned, and there is a feeling of always being on the defense, I look for the offensive opportunities, the positive ways to shine a good light on the industry and the good we are doing.”

Frketich says the China tariff issue has people paying attention to hazelnuts. “We have a soapbox to stand on now. The world of farming is quite small, but we are dealing with worldwide issues.”

Janis Rizzuto has been a freelance writer and copy editor for LMU Magazine for more than 10 years. She has a professional background in communications in the fields of education, financial services and health care. Rizzuto earned a bachelor’s degree in English from UC Irvine and a master’s degree in print journalism from USC.

This story was posted to the LMU Magazine website on Sept. 18, 2018.