FOR IMMEDIATE RELEASE
June 25, 2018
OKLAHOMA COMPANY STARTS HAZELNUT PROJECT IN OREGON
Raptor Ag has raised $25 million and planted 200,000 hazelnut trees in the past 12 months, with more on the way
EDMOND, Okla. – Raptor Ag, LLC, based in Edmond, Okla., recently announced its hazelnut orchard development project in Oregon’s Willamette Valley. Over the past year, the company has raised $25 million to develop the project’s initial phase, purchasing approximately 1,000 acres and acquiring an additional 600 acres through long-term leases.
As part of its hazelnut project, Raptor Ag planted more than 200,000 hazelnut trees last winter, with nearly 100,000 more to be planted this year, along with laying nearly 400 miles of irrigation drip lines.
“As my partners and I contemplated forming Raptor Ag several years ago, we considered various agriculture projects,” said Chris Eubanks, partner and CEO of Raptor Ag.
“The hazelnut market has been expanding for years, in part because the hazelnut is arguably the healthiest tree nut in the world – comparable to almonds in total nutritional content. Additionally, the Willamette Valley has high-quality soils; plenty of irrigation water; and a mild, predictable climate. All those factors convinced us to invest in hazelnuts.”
A majority of the worldwide hazelnut supply is produced in Turkey, with Italy a distant second place. The U.S. produces about 5 to 7 percent of the world’s supply, with virtually all of the U.S. production (approximately 80,000 acres) in Oregon’s Willamette Valley.
Consumers are likely most familiar with hazelnuts through Nutella®, which sells hundreds of thousands of tons of the chocolate-hazelnut spread throughout the world each year.
“We like investments in permanent crops that are capital intensive because those crops tend to have a very good return on investment, and the capital requirements limit overproduction potential,” said Jason Perkins, partner in Raptor Ag. “This investment in the booming Oregon hazelnut market makes Raptor Ag one of the largest single hazelnut orchard operators in the country.
“Hazelnuts made sense because, along with strong returns and the water resources of Oregon, production risk is minimal. Oregon’s multi-generational hazelnut producers often state they don’t ever remember a year where they didn’t have positive cash flow on mature trees. So even the worst years for yield and commodity prices were still profitable. Most years are highly profitable. Over the past 20 years, hazelnut prices have increased, on average, about 5 percent per year.
Raptor Ag is partially funded through private equity.
“Our equity funding is currently sourced through individuals, family offices and small private equity shops,” Perkins said. “Although the investment horizon is longer term because we’re dealing with the establishment of a permanent crop, projected investor average annual returns over 20 years are in the low-to-mid teens. Combined with minimal risk, it’s an attractive option for investors that desire to get into the agriculture sector.”
The company is evaluating acreage around its core of operations for the next phase of expansion.
“We expect to grow to 4,000 acres over the next 36 months,” Eubanks said. “After that, expansion is less certain. There is a finite amount of suitable soil in the Willamette Valley, and when it’s gone, it’s gone. Currently, no other region in the country can commercially grow hazelnuts in any scale.”
Raptor Ag’s Oregon operations staff includes five full-time employees with 75 years of combined agriculture experience, along with contract labor. The staff includes an agronomist and former manager of another large hazelnut operation. Administrative and accounting functions are performed at the company’s Edmond and Murray, Ky., offices. More information on Raptor Ag can be found at www.RaptorAg.com.
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