Here is an excerpt from an article written about making a profit from nut trees written by John Gardner, a Horticultural Crop Adviser for growers in southern Ontario and Quebec. After acknowledging the wisdom of J. Russell Smith in his book Tree Crops, A Permanent Agriculture, and tracing the history of agriculture from the 1970’s through 1989, Gardener describes how to commercialize a nut growing venture for profit.
Jerry Henkin, NNGA Librarian
Commercial Nut Growing in Ontario – A Horticultural Crop Advisor’s Viewpoint *
by John Gardner
I believe for some, these [nut] crops can be grown with the intent of and primarily for profit. This is the essence of commercialism. Realizing a profit, however, may be a different story. Production itself is a basis for success, but it is no guarantee of success. What you grow is not the essential element. It is what you sell that counts as you strive for profit.
Before crops are produced strategies must be looked at in order to penetrate the smallest market or market niche. Joint venture marketing may have to be used in order to deal with large volume selling. We must be prepared to add value by cracking or peeling as in the case with chestnut or do whatever it takes to win sales. The products must be easily identifiable, present a clean upbeat image and be convenient for today’s life-styles.
Commercial growers may soon lose the fascination for the production end of the formula. You really do not make a nickel from growing anything and profits can easily be left in the field in an unharvested condition because of poor management, equipment failures, or by some unforeseeable “act of God.” If you do not have a crop because of frost or drought, your overhead costs are still there and in orcharding they could amount to 60% of costs incurred with a crop. This is the reality.
The costs in setting up for commercial production in many ways are similar to those incurred in setting up any other orchard enterprise. Establishment costs per acre could run to 4 or 5 thousand dollars considering fixed and variable costs. The cost recovery period may run a decade depending on how things work out. However, returns on investment could conceivably be incremental starting out about 4 years after planting when an acre of edible chestnuts for instance could yield 2 or 3 hundred pounds of marketable product. You can offset some establishment costs by intercropping a spray compatible cash crop; perhaps soybean.
As a commercial grower you must be prepared to prune, irrigate, mow spray, hire and manage labor, harvest, cure, store and market your product. You will also have to compete with industry for labor. Industrial jobs are now paying up to $18.00 per hour for unskilled labor because of a booming economy in southwestern Ontario. This is not good for producers relying on high labor inputs to produce and market a crop. This would force mechanization. All topography may not be suitable for lift bucket pruning or mechanical shaking and sweeping. To acquire capital assets such as these labor-saving devices you can figure on dollar inputs in multiples of $10,000 for starters. It is wise to sit down with a knowledgeable farm management advisor and do a risk analysis of your proposal.
I realize I am not addressing a homogeneous group with similar aspirations – similar interests yes. You may have in mind an acre or two and aspirations for peace of mind or hobby growing rather than great monetary profits. This can be very rewarding and psychologically profitable without an all-out assault on the marketplace. Growing these types of crops can provide an interest for years and be a marvelous therapy. Economy of scale comes into play as you move from small acreage upwards. To justify equipment costs you may find it necessary to plant upwards of 15 or 20 acres.
The cottage industry concept may be the way for many of you to start out. A small scale business operated from the home can have a number of advantages until a producer feels his way through the production and marketing channels while not getting in too deep. Many techniques and labor-saving devices for small acreage businesses have been described in some of NNGA annual reports. A few thousand pounds of nuts if cured and packaged properly could conceivably be sold in this manner directly to the consumer. Many countries globally are taking a rather bullish or optimistic approach to planting with this in mind.
The highest quality nursery stock must be available to growers for transplanting. A year lost in the field because of a poor root system at transplanting may be too much to cope with in a commercial enterprise. Tree nut crops must be matched carefully to site and soil for commercial success. Do not expect to get good results from planting chestnut on heavy clay soil or Carpathian walnut on imperfectly drained soils sitting in a frost pocket. Chestnut requires acid sand and lots of moisture just as walnut does best on deep friable well drained loam soil with good air drainage for frost control.
A commercial planting should be based primarily on asexually propagated nursery stock. Seedlings from superior parent stock can play a major role for some nut crops in supplying viable pollen and a significant amount of production such as chestnut and heartnut. However, you cannot hope for a good chance seedling. Uniform vigor, growth, flowering and maturity of crop as well as consistent handling characteristics of the finished product are essential ingredients in large scale orchard culture.
I can visualize higher planting densities than we now talk about. This will conceivably increase yields and production efficiency. However, cultivars with growth characteristics similar to Hansen walnut, dwarfing in nature and with lateral bearing characteristics as with Lucas pecan and Harrison walnut, will have to be found. Judicious pruning to ensure ideal tree shape and light utilization will have to be employed to maintain yields and long-term production for crops like Carpathian walnut. This will come with persistent efforts.
Back in about 1980-81 we had just started to get some good results from a grafting program using an established 12-year-old black walnut grove for understock. Onto the black walnut we grafted a variety of cultivars of Carpathia German origin many of the names with which you are familiar: Lake, Hansen, Metcalfe, Fatley No. 5, etc. The project was made possible by The Upper Thames Valley Conservation Authority near London, Ontario.
The grafting done in ’80 and ’81 had taken on an encouraging proportion. However, some grafts were young and some particularly vulnerable. The bark grafting was in some cases not well knitted or healed over compared to “cleft” and “whip and tongue. ” We had a bad winter. Temperatures plummeted 25 degrees in one evening to a low of -28 degrees F in December of ’81 before deciduous trees in the region had accumulated maximum cold hardiness. I think it was Christmas Eve. I thought that was the start of the end of that program. I did not want to go back into the grove and face the consequences. That same winter, apple growers anxious to get on with dormant pruning started in on some blocks against all advice sometime in late January, early February.
Spring came around and I was shocked. The Carpathian walnut grafts had survived virtually unscathed. Large volumes of replacement apple nursery stock were shipped by nurserymen to points all over eastern Canada to reestablish killed out apple orchards. This was a good omen for the prospects of nut culture in the area. We persisted with the project and today it stands as an excellent educational and demonstration project holding fine specimens of over 20 different Carpathian walnut cultivars.
I would encourage you to be “persistent” in your efforts. It will continue to pay off. Dig out the best information you can get your hands on and talk to as many individuals as possible – all have something to add. Talk to other growers, extension people, foresters, nurserymen, and machinery specialists.
* “Commercial Nut Growing in Ontario, A Horticultural Crop Advisor’s Viewpoint,” John Gardner, 80th NNGA Annual Report, 1989, pp 168 – 170