Dear Oregon Hazelnut Grower,
2012 CROP UPDATE
You may recall back in November 2012 I was “optimistic” that we’d be able to deliver a higher return to cooperative members. Well, with the crop year nearing completion I can safely say that we’ve earned profits that will enable us to pay the following to cooperative members:
20% pay back on the supplemental retain that was taken last year. This is equivalent to approximately $0.02 cents per member pound on the 2012 crop. The 20% payment of the supplemental retain has been approved by your Board and is scheduled to be paid in October unless you advise us you want to defer this amount until next year. We’re able to pay this amount based on the level of non-patronage earnings we achieved this year. Be advised that if you take the payment in this year it will become taxable to you on your 2012 income taxes.
Patronage earnings of $0.04 - $0.05 cents per lb. The co-op had strong sales of both inshell and kernel varieties in the year. Additionally, we focused on continuous improvement and cost reduction strategies that helped to improve our operating profitability. Of course, we need to complete the year and close our books but I’m confident that we will return patronage earnings to co-op members of an additional $0.04 - $0.05 cents per lb. We will schedule those payments in January or February once the crop pool is closed and advise you of the actual earnings amount at that time.
The additional earnings are in addition to what we’ve already paid to ALL growers that delivered to HGO. On average, we beat the competition by 10% for members and 3% for cash growers.
2013 CROP UPDATE
We’re eagerly anticipating another good crop year. The USDA objective survey results came out at the end of July and they’ve estimated the 2013 crop at 40,000 tons. This is 8.1% higher than the 2012 crop of 37,000 tons.
We’ve got plenty of new and existing totes available for our members and our receiving stations are well prepared to receive your deliveries.
We’ve also declared an advance premium and a pool for Jefferson variety which is in addition to our existing premiums for Ennis and high shell-out varieties.
The Turkish crop size is down this year, therefore prices for Turkish crop are higher than 2012. Additionally, the domestic tree nut crops (almonds, walnuts, pecans, etc.) are showing increasing demand and their prices are up as well. We strongly believe that early sales for Oregon Hazelnuts will be robust both in terms of price and volume. Of course, we’re not solely reliant on our inshell sales, due to our ever increasing sales mix of kernels and value-added products. This should continue into 2013-14 and we expect to deliver another good year of competitive returns to both cash growers and our grower-members. As always, we’re continuing to look at opportunities to improve our productivity and throughput at our plant which will also deliver higher profitability.
On behalf of your Board of Directors and all of us here at HGO/Westnut, we want to thank you for your continued patronage and support. We value our members and will strive to live by our core values and staying “GROWER OWNED and GROWER COMMITTED”.
Please call us if you have any questions and we look forward to seeing you at harvest time.
Jeff J. Fox