Guaranteed Minimum Grower Field Price
At George Packing Company, we work to be loyal to our growers and predictable to our customers. Part of that process is our membership in the Hazelnut Growe-100vwrs Bargaining Association (HGBA) to set the grower field price to the maximum advantage of the grower.
Global events and market forces, such as trade disputes, Turkish crops and Turkish currency troubles, play a significant role in the market field price for Oregon hazelnuts. Closer to home, processing margins paid to your packer, have historically affected the field prices paid to growers.
As we look at the field prices paid to hazelnut growers today, it is amazing to see how far we’ve come. Gone are the field prices of less than $.30/lb. which often didn’t even cover the cost of production.
The HGBA contract has governed the hazelnut industry for many years, providing growers and processors transparency and stability in the buying and selling of hazelnuts. We have a strong industry because of our open dialogue, cooperation, and trust established between growers and processors. For future generations of farmers, we are committed to build on the traditions which have served the hazelnut industry so well.
Key Questions Farmers Are Asking
What is the Hazelnut Growers Bargaining Association contract?
The HGBA contract is unique to our industry and the U.S. As a pro-grower contract, it sets a starting price for the opening minimum in the fall, commonly called the “Guaranteed Minimum.” Processors then compete in the markets to maximize their price back to the grower during the entire marketing year for the “final field price” (also called profit shares) in late Winter or early Spring.
The HGBA contract supports its processors by clearly defining rules for grading, dockage, cleaning and drying, transportation, payment terms, and requiring all growers to be treated the same.
As one of the most transparent and pro-farmer contracts in the entire U.S., it is the envy of other commodity groups. Instead of placing the potential risk on the hazelnut farmer to absorb, cash growers can count on a specific price regardless of market fluctuations. This gives growers all the upside over the entire market year, without the downside risk.
What is the HGBA “Guaranteed Minimum” Field Price?
The HGBA guaranteed minimum is the price set in September or October which cash processors are required to pay growers regardless of market fluctuations. Your final price never goes down and only goes up with your processor’s ability to market your hazelnuts, resulting in a profit share bonus announced each Spring. Oregon’s “cash hazelnut farmers” are among the few U.S. farmers guaranteed a minimum price before harvest, while also realizing the upside as the market develops.
How does the “Guaranteed Minimum” price affect the world hazelnut market?
Oregon only makes up about 4% of the world hazelnut market. The September “guaranteed minimum” in Oregon does not set world hazelnut prices. Your “final price” is based on your processor’s ability to maximize the price above the guaranteed minimum.
To whom does the “Guaranteed Minimum” price apply?
The guaranteed minimum field price only applies to processors who pay you cash at 45 days delivery and sign a contract with the HGBA. Cash processors who do not sign with the HGBA, and hazelnut cooperatives, are not required to pay growers the guaranteed minimum field price.
Why do some processors claim to be the one “advocating for a higher ‘Guaranteed Minimum’?”
Non-HGBA processors are not required to pay HGBA guaranteed minimums or follow HGBA rules requiring that all growers be treated the same. It’s easy for a packer to claim they have “advocated” for a higher “guaranteed minimum” when they will not be held to the same original guaranteed price or required to pay the bonus price increase in the Spring. Market savvy growers are paying close attention to their processor’s year-to-year record in paying out a final price and to the transparency of their processor’s final price.
Who are Oregon’s HGBA signed processors?
- George Packing Company
- Willamette Hazelnut Company
- Denfeld Packing Company
- Westnut LLC
- Northwest Hazelnut Company