September 23, 2024
Dear HGBA member,
The purpose of the Hazelnut Growers Bargaining Association (HGBA) is simple: negotiate the terms between our members and the signatory packers/processors.
The HGBA’s sole objective is to create a transparent process so our members can be assured they are receiving all they are due within the world market. The primary terms the HGBA negotiates include:
The packer margin “fixed fee”.
A guaranteed payment within 45 days.
Standardized cleaning, drying and quality discounts.
Evaluate the market and negotiate the final field price the following Spring.
Maintain the ability to audit packers if needed.
The contract between the HGBA and signatory packers is very onerous on the signatory packer/processors as we have the right to audit their books and to hold their margin to the negotiated “fixed fee” allowed by the contract. We are fortunate to have packers that support the industry through the transparent contract your HGBA has developed over the years.
As always, your final field price will be set by the market, which in turn is set by the world-wide supply and demand of hazelnuts. Numerous factors have allowed our packers to differentiate Oregon hazelnuts from our world competitors. We have expressed our expectation that the remaining processors need to work to maximize any “Oregon premium” from the market and pass that onto our members. The HGBA signatory packers are committed to developing new markets and leaning into the reliable ones to maximize our grower’s final price and re-establish our “Oregon premium”.
It may seem that receiving more money earlier in the process would be beneficial however, the fact is that it can actually lead the processors to liquidate inventory prematurely, lowering the final field prices in the Spring. In negotiations with the Oregon packers, we have developed a payment schedule that will give our growers up-front cash, while still allowing the processors to work hard to push prices upwards.
During the contract negotiations on the terms, the processors did not ask, nor did we allow the processor margin to be increased from the fixed fee we had in the past contracts. Processors have experienced the same 20% inflation on their costs as our farmers, but they have not been allowed to increase the margin to cover those additional costs. We view this as a big win for Oregon farmers since it continues to put more money in our growers’ pockets.
The 2024 “Guaranteed Grower Advance” for the 2024 Oregon hazelnut crop are as follows:
Advance Payment: High shell-out: $0.90/lb., Mid-Shell-out: $0.80/lb., Low shell-out/Inshell $0.75/lb.
45-day payment: $.60/lb. Remainder: March 15th, 2025High shell-out Varieties: $0.90/lb.
Includes: McDonald, Sacajawea and CasinaMid-Shell-out Varieties: $0.80/lb.
Includes Wepster, Clark, Willamette, Yamhill, Santiam, Lewis, Dorris and Polly-OLow shell-out/Inshell Varieties: $0.75/lb.
Includes: Barcelona, Jefferson and EnnisField Price Review #1. January 15th, 2025, #2. March 15th, 2025
Final Field Price Payment No Later Than July 31st, 2025
As you know, two packers/processors with nearly 30% market share chose to exit the market due to the tight “processor margin” in the Oregon hazelnut industry. This placed a significant responsibility on the HGBA signatory processors to absorb the 30% market share. However, we have been extremely impressed that our packers have absorbed this volume with little disruption to growers, and without approaching HGBA in search of a bigger processor margin. We are optimistic about the market going forward, please make sure you deliver the highest quality hazelnuts to the market. Good luck this year and thank you!
2024 Signatory packers are: George Packing, NW Hazelnut, Willamette Hazelnut and Hazelnut Growers of Oregon.
Sincerely,
The HGBA board of directors