Analyzing Production Costs of Organic Hazelnuts in Oregon

Progress report for OW21-367

Project Type: Professional + Producer
Funds awarded in 2021: $73,124.00
Projected End Date: 06/30/2024
Host Institution Award ID: G364-21-W8614
Grant Recipient: Oregon Tilth
Region: Western
State: Oregon
Principal Investigator:
Ben Bowell
Oregon Tilth
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Project Information


A recent market study identified strong potential to grow Oregon’s nascent organic hazelnut industry, advancing the crop as an economically and ecologically rewarding opportunity for more small farmers. This project aims to improve the viability of organic hazelnut enterprises by helping producers better understand their production costs and improve financial decision-making. PI Tanya Murray of Oregon Tilth will work with a group of six to ten producers from the Oregon Organic Hazelnut Cooperative (OOHC) to develop and pilot an approach for determining and analyzing production costs. The team will develop a costing model with input from an agricultural economist with expertise in tree crop enterprise budgeting. Murray will coach and support producers to use the approach to track and calculate costs of production activities on their own farms over two seasons; and then evaluate how various changes to practices, labor, equipment, scale, etc., can increase profitability. The pilot will inform refinement of the approach and development of a sharable model and user guide. Resources will be electronically published and the project will be shared with producers at Nut Growers’ Society Annual winter meetings and OOHC summer orchard tours. An educational webinar will be developed for Extension and other service providers to learn how to support organic nut producers using the approach. The project will help increase the viability of organic hazelnut enterprises, build interest in transition, and grow the industry’s role in Oregon’s farming future.

Project Objectives:

1. Develop a production costing model, time study protocols, and data collection requirements for organic hazelnut enterprises.

2. Develop and implement on-farm data collection and recordkeeping processes that producers can use with the costing model.

3. Test the feasibility and effectiveness of the costing approach through a pilot on six to ten organic hazelnut farms.

4. Generate results from analysis that producers expect to support improved management and increased profitability of their enterprises.

5. Refine the cost analysis approach and develop user guidance; broadly disseminate resources and lessons learned to other organic hazelnut and other organic nut producers, as well as those interested in transition.

6. Increase Extension agents' and other service providers’ knowledge of and interest in using the resources to support organic hazelnut and other organic nut producers to conduct their own cost analysis.

April-June 2021 
Kickoff meeting.
Costing model and data collection process developed. (Objective 1). PI leads design. Producers and technical advisor provide input.
July-September 2021
Early summer meeting. Discussion/planning re: on-farm recordkeeping systems. (Objective 1,2)
Producers establish recordkeeping systems with guidance from PI. (Objective 2)
Introduce project at Summer Nut Tour. (est. 100 people) (Objective 5)
Late summer meeting. Finalize data collection plans/timeline; recordkeeping details. Agree on coaching/ communications practices. 
October 2021-October 2022
Producers conduct time studies; collect data throughout season. PI provides assistance & support (weekly reminders, monthly check-ins.)(Objective 3)
July 2022
Project update at Summer Nut Tour (est. 100 people) (Objective 5)
October 2022-October 2023
Producers conduct time studies; collect data throughout season 2. PI provides ongoing support (weekly reminders, monthly check-ins.)(Objective 3)
January-March 2023
Producers conduct calculations/analysis of Season 1 data. PI provides ongoing support. (Objective 3,4)
PI refines model/process with input from producers. (Objective 1,5)
PI, AR, producers table at winter NGS meeting (est. 500 people)(Objective 5)
July 2023
Project update at Summer Nut Tour. (est. 100 people)(Objective 5)
January-March 2024
Producers conduct calculations/analysis of Season 2 data. PI provides support. (Objective 3,4)
PI finalizes model; develops user guidance; resources published on websites. (Objective 5,6)
Resources publicized through communications channels, partner networks. (Objective 5,6)
PI & AR plan, coordinate, conduct panel presentation at winter NGS meeting, with participation from other producers. (est. 200 people)(Objective 5)
PI develops & leads webinar for service providers. Producers contribute & participate. (est 100-200 people)(Objective 6)
PI leads evaluation and reporting activities.
OOHC continues to share lessons learned with members & other producers, increase knowledge and resources, build support system, identify next steps & needs.


Click linked name(s) to expand/collapse or show everyone's info
  • Margaret Bengry - Producer (Researcher)
  • Ben Bowell - Technical Advisor (Educator)
  • Cassedea Ashley - Producer (Researcher)
  • Ben Larson - Producer (Educator and Researcher)
  • Raina Wickstrom - Producer (Researcher)
  • Mary Stehman - Producer (Researcher)
  • Lori Stole - Producer (Researcher)


Materials and methods:

Research will investigate how organic hazelnut producers can analyze their costs of production to increase the profitability of their enterprises. This study is a form of farm management economic analysis; it aims to equip farmers to better understand how their businesses are performing and how performance could be improved. Standardized financial tools can be helpful but limited for small-scale organic farms. For instance, conventional enterprise budgets may not reflect key cost considerations associated with different production techniques, processing requirements, and labor allocation. It's important for producers to look at costs in the unique context and conditions of their operations, using their actual, current costs to produce accurate, meaningful analysis. The research plan will focus on designing and testing an approach that can fill this need.

Once developed, the approach can be used by organic hazelnut growers and other organic tree nut producers as a tool for management and decision-making. It can help them calculate costs, understand how different production activities affect profitability, analyze the impact of potential changes to their systems and scale, and make choices leading to better financial outcomes. Ultimately, our goal is to help these producers grow healthy, sustainable farm businesses, inspire others to transition, and build a thriving sector with long-term economic opportunities and ecological benefits for the region. To accomplish this goal, research objectives and methods will include:

  1. Develop a production costing model, time study protocols, and data collection requirements for organic hazelnut enterprises. The PI will design the model with extensive input from the producer team and the technical advisor. The model will include all relevant fixed and variable cost categories; including labor, machinery, and materials broken into key production activities. WSU agricultural economist Suzette Galinato will provide technical advising to the project. Suzette is the Assistant Director of WSU’s IMPACT Center, where her focus includes cost analysis and enterprise budget development for regional tree and specialty crops. Suzette will be contracted for ten hours of input and review on design and development of the cost analysis model. (Suzette will not be a cooperator but she will receive a contract service fee. A letter of agreement and scope of work are attached in Letters of Support. A CV is attached in CVs.)

    Time studies will be developed as short exercises using stopwatches or cellphones to measure time to complete tasks under standard conditions, e.g., “minutes to mow one acre of orchard floor @ two passes of flail mower per row.” Producers will then track tasks throughout the season, for example, recording the number of times mowing is performed. At season’s end  the data can be extrapolated to calculate total time spent per activity and estimate the cost of that activity. An Excel-based spreadsheet template will be created for data input and calculations.

  2. Develop and implement on-farm data collection and recordkeeping processes that producers can use with the costing model. Each producer will identify existing recordkeeping systems and/or develop systems that can be used to capture the necessary data on their farm. Producers will determine the data to be tracked, how, with what equipment (whiteboards, iPads, voice memos, etc.), where, when, by whom, etc. Our past experience highlighted the importance of establishing data collection and recording systems prior to the start of the season. It’s also critical that these systems are practically integrated into farm operations and employees trained so data can be consistently and accurately captured. The PI will provide guidance and suggestions to help each producer establish efficient systems prior to the start of data collection in fall 2021.  

  3. Test the feasibility and effectiveness of the costing approach through a pilot on six to ten organic hazelnut farms. Producers will collect two seasons of data, beginning with post-harvest mowing and fall fertilization in Fall 2021 and ending with the Fall 2023 harvest. The PI will conduct regular check-ins with participants via phone and email, helping them stay on track, make adjustments, and troubleshoot if necessary. The group will also meet several times (in-person or virtually) to discuss progress and share insights. Producers will calculate and analyze the cost data collected from the 2022 season in the winter of 2023. The PI will help producers calculate costs and incorporate revenue data for a complete picture of profitability. Throughout the pilot we’ll identify key considerations for data collection, challenges that arise, and ideas to improve the process.

  4. Generate results from analysis that producers expect to support improved management and increased profitability of their enterprises. After completing calculations on the first year of data, we expect producers to have a more thorough, detailed understanding of production costs, especially labor costs associated with specific activities, and how these costs are driving profitability. With this analysis they can explore the potential effects of various changes to production methods, scale, equipment, timing, and labor strategies. Some may compare costs between different practices, for example, hand-cutting suckers vs. mowing with a side-cutter, or sweep vs. "catch and shake" harvesting. Producers with more than one variety may compare costs associated with the management requirements of each. Costs of conservation activities such as hedgerows and cover crops can also be incorporated and evaluated. Growers might also examine processing costs, weighing the advantages of investing in their own wash and dry lines or contracting for those services. On the marketing side, they can analyze packaging, delivery, and sales costs in the context of their revenue strategies; for instance, looking at how substituting a portion of retail sales with wholesale accounts may lower costs and increase returns.

    While we don’t expect producers to realize major increases in profitability during the short project time frame, we anticipate they’ll report having thought through the implications of their analysis and identified steps they will take to strengthen their businesses and improve the bottom line. They can begin to implement these as they continue to track data for a second season.

Project location: Participating producers operate diverse organic hazelnut farms in the Willamette Valley. Farms include the oldest organic hazelnut orchard in OR, dating back to 1965, as well as several that will soon harvest their first crops. Many are growing newer varieties designed for resistance to EFB, which devastated Northwest orchards beginning in the 1960s. Producers' farms are described above, in "Agricultural Business/Operation of the Project Members." Other producers have expressed interested in participating; an additional two to four farms may be added before the project begins. 

Research results and discussion:

1. We have developed a simple cost calculation tool that is based on using time studies on labor activities to estimate labor costs. The tool also allows for accounting for other non-labor inputs such as machinery costs and soil amendments. Methods for recording time studies (which are the primary data collection requirement) were established in the fall of 2021 before data collection began.

2. Growers have been experimenting with record keeping systems on their farms including recording time study data on a written time log, texting, google forms and whiteboards.

3. Growers began testing the tool by collecting data on their orchards in 2021 and 2022. During this period the PI conducted in-depth individual meetings with each participating grower to support them with their data collection to get input on the effectiveness of the approach. This included on-site visits with 5 of the 6 farmers in the late summer of 2022. Growers calculated preliminary results based on 2022 data and discussed results at a virtual meeting on December 13th, 2022.

4. Based on the first year preliminary results, the growers are honing in on further analysis they would like to look at. One grower plans to incorporate their cost of production results into a larger analysis of the profitability of direct marketing versus selling to a processor. Another grower intends to do an analysis of investing in their own processing equipment. Growers are continuing to collect data during the 2022-2023 season.

Refinements to the tool have been made and will continue to be made as the growers continue to use it and provide input on what is working for them and what is not. Suzette Galinato has provided input that was used in the initial design and will continue to be consulted with as the tool is further developed.

Participation Summary
6 Producers participating in research

Research Outcomes

No research outcomes

Education and Outreach

2 Webinars / talks / presentations
1 Other educational activities: Tabling at Nut Society Winter Meeting

Participation Summary:

30 Farmers participated
10 Ag professionals participated
Education and outreach methods and analyses:

Per our Project Activity and Deliverable Timeline as detailed in the Scope of Work for this project submitted with the Sub-recipient Commitment Form on June 1st 2021, the following education activities have taken place:

Ben Larson, Project Cooperator (Educator and Researcher) gave a short presentation about the project at the Summer Nut Tour on August 14th, 2021.  

Tanya Murray, Project PI gave a short presentation about the project at the Organic Hazelnut Annual Farm Tour on August 19th, 2022.

This presentation provided attendees of the event with an update on the project and ways to get involved. Murray also led participants through a simple costing exercise focused on estimating some the different costs and other factors that go into cost analysis including the cost of different production tasks (pruning, mowing, harvesting), the cost of amendments and the expected yields in an organic system.

The project PI tabled at the  Nut Grower Society Winter meeting on January 12th, 2023 to increase awareness of the project.

Education and outreach results:

At the 2022 Organic Hazelnut Annual Farm Tour presentation growers were highly engaged in the costing exercise. The exercise was structured as small group activity where each table had discussed a different factor that goes into cost of production. For example, one table discussed organic yields and options for increasing yield in an organic system. Another table discussed the harvest labor and identified factors that affect the amount of time that harvest takes. A third table discussed soil amendments/fertilizer application costs. Focusing this cost analysis exercise on the growers' actual production experience seemed to make a cost analysis on a spreadsheet come to life and seemed to spur interest in thinking about the economic viability of organic hazelnut production.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.