- Good evening, everyone.  My name is Ian Meeker.  I work with the University of Wisconsin-Extension office in Bayfield County, and I wanna welcome you to the Great Lakes Visitors Center in this portion of the Northern Lights Tour that is going across the northern part of Wisconsin.  Jason Fischbach is the agricultural agent for Ashland and Bayfield County, but he's also the woody biomass crop specialist for UW-Extension, doing research up here in the North, primarily with some fast growing poplar but also hazelnuts.  And seeing Jason day to day, he's got a couple researchers that are in the office as well.  I had no idea how many different strains of hazelnuts there are, both wild and domesticated.  And they've been doing trials all across the county and the region to try and figure out what hazelnuts grow most effective in this area.  So I'm gonna introduce Jason, and he can tell you all about it.   (audience applause)  - Thanks, Ian.  Good evening. 

 Everyone doing okay? It's getting late, I know.  Okay.  So I'm gonna tell you tonight about the hazelnut story, give you an update on the work that we've been doing since, in my case, since 2005 before I even joined Extension.  This is a project I picked up in graduate school.  It's a project that is quickly snowballing into something that's out of our control.  It's moving so quickly, and it's international in scope partly because of you, the consumers, who apparently have discovered hazelnuts, and you want more hazelnuts.  But that said, how many of you have actually even eaten a hazelnut that you know of? Okay.  I'll talk to you why that's happening, but it's really exciting because it creates opportunities for our region, specifically because we have hazelnuts in our backyard.  If you've been out to the barrens as part of the National Forest, it's hazelnut as far as the eye can see.  They consider it a weed. 

 Little do they know it's quite a biological treasure we have in our own backyard.  With that, let me start talking about hazelnuts 101 to give you some update.  If you've ever heard of a filbert, it's the same thing as a hazelnut.  Or a cobnut, same thing as a hazelnut.  I'm gonna use the term hazelnuts.  Filberts, it's out of style.  If you're using filbert, you're getting kind of old and out of date, so it's hazelnuts.  And then I'm gonna talk more specifically about the kind of work that we're doing to make this into an industry that's profitable, that's sustainable, that has a long-term future for Wisconsin, particularly northern Wisconsin.  And that gets to do with plant breeding.  The university, since its existence, has played a primary role in developing new crops, new varieties, and this is just a continuation of that long history. 

 Just happens to be hazelnuts.  It's also a woody perennial plant, which means it's a long-term breeding project.  To get from your first cross to a released variety, it's 17 years.  That means as a researcher, as a professional, you're always standing on someone else's shoulders, and you just hope that everyone has the commitment to the project that somebody stands on your shoulders at some point down the line.  So it challenges the university model.  It challenges funders.  It challenges everybody's patience to be able to get these crops to the market.  So once you get the pipeline going, though, then it goes quickly.  You just have to get to that first one.  Okay, so when we talk about hazelnuts, we're talking primarily about three species. 

 Beaked hazelnut and American hazelnut both occur in the wild here.  They're both native to eastern North America, and American hazelnut in particular has quite a wide range.  It's widely adapted.  European hazelnut is where 99. 99% of hazelnuts come from right now.  And there are named cultivars of European hazelnut grows all over the Mediterranean, and it grows wild from Moscow south to the Mediterranean.  It's all over Europe.  That's why it's called European hazelnut.  So American hazelnut is winter-hardy.  Survives our winters very well. 

 It's also resistant to a disease called eastern filbert blight.  European hazelnut is not hardy to our region, and it gets decimated by Eastern Filbert Blight, a disease.  But the problem with American hazelnut is that the nuts are really small.  The shells are pretty thick.  Anyone who's wild harvested knows what a pain it is to sit there and hand crack those and get those little kernels out.  So primarily what we're doing when you talk about commercial hazelnut production in the Upper Midwest, we're talking about hybrid hazelnuts, simply nothing more than crosses between the European hazelnut and the American hazelnut.  And this gives you an example of the diversity of, so you take one parent is American, the other parent is European.  You crossed them, and these are all their offspring.  And just like when you have kids, they're all different.  Same thing. 

 So you can see the range in the presentation of the nut clusters, big leafy involucres here to a more European-looking nut where the nut's fairly exposed.  So that's a great opportunity for us because it's a lot of diversity to choose from and a lot of opportunity to find and prove material that's locally adapted, and that's primarily what our project is all about.  This is the model for how European hazelnuts are produced in the Willamette Valley of Oregon.  This is a laser leveled field.  Typically, there's not much vegetation.  This particular field, the row middles are bare.  Sometimes they'll, in the early years, they'll grow grass seed crops or clover seed crops.  But the reason that the orchard floor looks like this is the way they harvest is the nuts fall out of the tree on the ground, and then they come along and sweep up those nuts, pick them up.  Now, Turkish production, which is where most hazelnuts are grown in the US, they're on shrubs, and they're hand harvested.  We don't have that kind of labor component to do that. 

 This is what a mature orchard might look like.  The canopy is fully closed and though you see there isn't much on the orchard floor.  This is important because we'll come back to this in terms of the way growers in the Upper Midwest envision hazelnuts being produced.  It's not like this.  It's a little bit different system.  So where are hazelnuts produced? Here is the 2007, 2011.  It's a little bit dated, but these trends are basically the same still today.  You can see world hazelnut production is dominated by Turkey.  There's a bit more in Italy, France, along the Mediterranean.  The US has made the graph but barely. 

 So there isn't a whole lot of production in the US except in the Willamette Valley in Oregon.  Primarily it's because we don't have improved germplasm for east of the Rockies, and that's what we're working on.  Top hazelnut consuming countries, you can see the Europeans eat a lot of hazelnuts.  The analogy is they eat hazelnuts like we eat peanuts.   And that, as you'll see, is starting to change a bit for the American side.  They don't eat a whole lot through 2011.  These numbers are still the same, but we're starting to see an increase in domestic consumption.   Like I said, hazelnut production is primarily limited to the Willamette Valley.  Notice a couple of things.  This is data from 1991. 

 The number of acres on this side and the tons of hazelnuts produced, and you can see over time the acreage has stayed relatively constant since 1991.  You see this alternate bearing pattern.  Like most masting tree species, they tend to have high yields one year and then they take the year off and then back up, and so you get this pattern.  Now, what's not on this chart, just recently in, since 2011, I was just actually at a hazelnut stakeholder meeting with researchers from Oregon.  They have added in the last four years about 29,000 acres.  Why is that? Because of Peer Ferrero, the makers of Nutella and the overall increase in demand for hazelnuts that's being driven by that awareness, which is starting with chocolate hazelnut spreads basically.  So we're seeing a significant increase in acreage in Oregon.  The reason is change is in the air.  Declining Turkish production is a big factor.  The Turks have small plantings, couple of acres on the hillside. 

 Mom and Dad own the planting.  They've done some handpicking, and they're getting old, and the kids have long left to go to the cities to work or have gone to Europe.  And so those hazelnut plantings are starting to disappear, so production is declining.   There's a growing North American market for sure.  We'll talk more about this Ferrero impact.  The other thing we're seeing is more interest in locally produced foods and healthier foods, and nuts are right at the top when they're produced locally and because of their healthy fatty acids.  So there's interest in foods.  The other part of it that's driving it, it's sort of a looming market force, it's not really a player at this point, is that nut oils make very good biodiesel, and they're perennial crops.  So if you're gonna produce, use agriculture to produce fuels, you'd like to have a perennial crop because of lower inputs, so you get a better net energy return.  You're gonna first sell your oil as salad oil or fresh eating at your highest dollar value, so we're not gonna see this happen. 

 You would never put hazelnut oil into your car at this point, right? But it does make really good biofuel.   So Nutella, they eat Nutella in Europe like we eat peanut butter.  And Peer Ferrero has made a concerted investment in North America to grow the market to the same scale in the US that it is currently in Europe.  That means a lot more hazelnuts.  Peer Ferrero, to make Nutella, uses about 40% of the world's hazelnuts supply.  They drive the industry.  As Nutella has had success getting their product, we've seen other companies copycat, right? So Jif has come out with a chocolate hazelnut spread.  Smuckers has a chocolate hazelnut spread.  We're also seeing hazelnuts start to show up more in mixed nut products.  And so what basically is happening is these products are creating consumer awareness about hazelnut, and now everyone else can ride their coattails and take advantage of consumers that now want more hazelnut. 

  So growers in the Midwest are catching on and understanding the market potential and understanding the potential for this crop from a sustainability standpoint, so they're starting to grow more.  So when we ask growers, "Why are you growing hazelnuts? "Why are you spending money on a crop "that you don't know is even gonna work yet "'cause we don't quite have the genetics figured out?" Well, there's a couple reasons.  One, they think they're going make money.  We've had to be kind of the wet blanket on that one for now and say, "Well, you might at some point in the future "but not with the genetics you're currently growing. " To eat hazelnuts, that one for sure you can plant hazelnuts.  They produce a lot of nuts, and if you're just growing them to eat them yourself, it's a great idea.  A lot of folks are doing it as a hobby.  I get more phone calls about hazelnuts from folks in their late 50s, about to retire.  They want a project when they retire, and so they're interested in hazelnuts.  It's all over the age spectrum, but that's primarily who calls me about hazelnuts, and it's more or less a hobby for them. 

 I think they maybe think that they'll make money, but I think at heart they know it's just an opportunity to stay busy and try something new in their retirement.  Some growers are growing hazelnuts to sell seedlings, to sell plants, and typically they're gonna be far more enthusiastic about the hazelnut industry.  Why? 'Cause they wanna sell you plants.  So remember that if you are buying plants that they're gonna be a little bit more optimistic than they maybe should be.  The big reason why we have folks that are interested in growing hazelnuts is what I call to be part of the solution.  They're early adopters that have recognized that there are real problems with our current agricultural systems.  So, for example, if you drive through much of the Upper Midwest, it's dominated by two crops, corn and soybeans.  That has real implications in terms of soil and water quality.  Even with conservation tillage, if you look at the NRCS's data, we still have the same amount of soil erosion today as we did back in the 1980s, despite all the conservation efforts.  Partly that's because the expansion of the production, and particularly recently, as we've seen, about half the CRP acreage get converted out into corn and beans, and so we have a nutrient problem. 

 We have a sediment problem in our agricultural systems.  That's one part of it, and I don't really dwell on that part of it.  The other part of it is, what else could we do with those acres? Is that really the only thing that our agricultural lands can produce is corn and soybeans? If you walk through wild areas, you see diverse canopies.  You see many, many different species of plants.  And so just from a scientific standpoint and biological potential, what else could the landscape support, particularly if we invested in the kind of plant breeding and agronomic development that could unlock that potential? That's what's exciting.  That's what's driving a lot of hazelnut producers, and they see hazelnuts as a candidate crop for those kinds of systems.  What they envision is something more like this so that you've got woody perennials that hold soil better.  Just heard more about what's being proposed in Minnesota is basically on all waterways a 50 foot buffer required of vegetation, not farmed.  It's coming out of their governor's office.  So what do you put in those buffers? Well, you could take them fully out of production, and that makes everybody mad because you can't produce anything. 

 Well, what if you had species that delivered all the conservation objectives that you wanted, and you could make money growing it? It's what we call productive conservation, and hazelnuts might just be the species that can do that or one of them.  And so you see this riparian forest buffer.  Instead of wild species or undomesticated species, you put in intentional planting communities  with assemblages of various species, try to maintain that conservation of wildlife habitat value, but you also can harvest and make money off those buffers.  So whether it's right or wrong, not really for me to say, but that's the reason why growers are planting hazelnuts as they see it as an alternative to the current model right now and see it as an improvement from a conservation standpoint.  So, like I said, growers are leading the way.  Here's your kind of first picture of what hazelnuts in the upper Midwest might look like.  It's a shrub form instead of a tree, which is very similar to how you see American hazelnut growing, very much as a shrub.   We've done survey work starting in 2008 to try to find these growers, and they're everywhere, but they're small.  The most plantings are less than 50 plants.  It's folks that are just trying them to get their feet wet. 

 We have some larger plantings upwards of 20 acres.  And this is only scratching the surface.  I host a Upper Midwest Hazelnut Growers Conference every year, and two years ago we held it in Gays Mills.  And the same day, so I gave a presentation there in the morning and then drove south to the mounds, which is the Tri-State Forest Stewardship Conference.  100 people there to learn about hazelnuts.  And I got there and said, "Well, why aren't you up the road "at the Hazelnut Growers Conference to learn about it?" "Well, because we're here to hear you speak. " Okay, I don't know any of you.  How many of you grow hazelnuts? Every hand went up, so there's another 100 people that aren't even on this chart.  Typically, we see a lot of folks that are involved in agricultural research that are trying hazelnuts, so they think that this is a good idea, I think, and so in their retirement, they try it out.  So we've got small growers all over the place just trialing the hazelnuts. 

 So in 2007, because of this emerging demand for knowledge about how to grow hazelnuts, a lot of the growers are coming to agriculture totally green and don't know much about weeds or pest management or how to plant something, how to water something.  So we recognize that need, and we launched the Upper Midwest Hazelnut Development Initiative.  I co-coordinate that with Lois Braun who's at the University of Minnesota.  So this is a project involves primarily Minnesota and Wisconsin researchers along with NGOs.  The initiative is expanding to include folks from Illinois and Iowa as well.  And we have four primary objectives.  The first is to develop suitable varieties of hazelnut.  If you buy hazelnut from the DNR, for example, you're getting wild American hazelnut.  It'll produce, but it's not gonna be enough or sufficient kernel quality to make a profitable industry.  If you plant European hazelnut, they're gonna die in our region, so we need something better, and so we're working to develop those suitable varieties. 

 Along with those varieties, we need agronomic practices.  We need best management practices to make sure that they're being managed well, so we work on those and run a series of trials across the region.   My role in particular is outreach education.  I'll show the website link later.  But we do annual field days, annual conferences.  I'm on the phone, it seems like, talking about hazelnuts all the time.  So there's just a great opportunity here to connect with all these growers that are trying hazelnuts.  And I'll show you how we're actually harnessing their energy to be not just growers but actually researchers at the same time.  Show you that in a little bit.  As they grow, even though they don't have suitable genetics at this point, they have hazelnuts, and they need a way to get them aggregated, processed, and at least have the opportunity to process and eat them or they get enough volume to start to sell to markets, which some of them are starting to do, so I'll talk more about our efforts there as well. 

 So this initiative has been working since 2007 is when it was launched, and so we're in our 8th year of this project.  So right now, as growers, you have basically four options, and I'll go into more detail on each of these as we go.  Clonal European cultivars, so clonal would be, you're probably familiar with Honeycrisp apple, right? Well, if you buy a Honeycrisp apple, it's the same as every other Honeycrisp apple.  They're all clones of each other.  That's how plants are sold.  Varieties become patented, typically, and then they're vegetatively propagated so they're all the same.  Or you have seedlings, and it's just what it sounds like.  It's grown from seed, so every seedling in a population will be genetically different.  So it's two important distinctions.  So clonal European cultivars, which are widely available, but they won't work in our region because we just don't have the climate for it. 

 Or full or half siblings from avellana or the European or Americana, the American hazelnut crosses, so you take two known parents that you think are pretty good, you cross them, and then you grow out their progeny.  So it's not clonal, but because they're all from the same parents, you have a little bit better uniformity in those populations, so you have a little bit more certainty in what to expect performancewise of that plant material.  That's available right now.  We have trials at six locations in Wisconsin looking at some of these controlled crosses.  Clonal hybrids, I'll get into this, but we're getting close to making available improved plant material that we think, at least at this point, could be the foundation for an industry.  We think we've got our first round of improved plant material available.  And then we're also looking at C.  americana, American hazelnut right out of the woods.  The cranberry industry, the blueberry industry, they all started with selections that somebody made right out of the woods.  There was no plant breeding involved in those first selections, so we may get lucky. 

 We've been screening wild populations, looking for high performing plants, and some of them might be good enough right away to support an industry.  So those are the four general areas of what kind  of plant material you might put in the ground.  Here's a fellow out by Montevideo on really nice soils, Montevideo, Minnesota, so you can see the hazelnuts, roughly what a mature planting might look like.  He's chosen to bare ground 'cause he's really interested in maximizing the growth of these hazelnuts to see what they can do.  This is the harvest that's being envisioned.  If anyone recognizes that machine, it's a blueberry picker used in Michigan for high bush blueberries, and it's being trialed a couple different blueberry pickers now in the Midwest being used to harvest hazelnuts.  It's still new.  The plant breeding has to develop plants that are well-suited to mechanical harvest.  Some of these plants are 20 feet tall, Some of them are five feet tall.  So, as we improve the genetics, we'll be thinking about plant form to match this style of harvest. 

 Most growers, though, at the scale they're at are just handpicking every fall.  So let's talk about the plant, specifically the plant breeding work 'cause I think it's interesting, and it definitely involves our region, and our region is participating in this process, which is exciting 'cause typically the northern Wisconsin, you know, what do we do, right? How do we get involved in these big university projects? So finally we are.  So the way it basically works is we've been screening, remember all those blue dots of all these on-farm plantings? Whether they knew it or not, they were creating this big population of seedling plants for us to come back later and select the top performing plants.  They thought maybe they were planting stuff that was ready to go, but, actually, they're not hazelnut growers.  They're data producers for us, which is great.  So we go through various forms, and we look for their top plants.  And from there, we don't really know if that plant is good genetically.  It could be that it's growing on a deer that died 10 years ago in that spot, so it could just be the environment's really good.  So we have to sort that out.  So the way we do that is propagate that plant. 

 We used mound layering to make about 20 copies or so, enough to populate our performance trials.  So then we take copies of these top plants and plant them out at multiple locations in replicate.  Then we'll know whether it's genetically a good plant, or if it just happened to be in a good environment.  So we have five replicated performance trials.  St.  Paul is the largest one because Minnesota coordinates a lot of this project.  Bayfield has the second largest project in our planting and our performance trial, and we'll be having our annual field day in Bayfield this year toward the end of August.  You'll be able to see the diversity that's in these populations.  So when we're selecting on farm, you can see down the row the diversity that's in these on-farm plantings.  You'll also see the different weed control intensities that different farmers have. 

 But as you walk down the row, all the plants look different.  Look at this monster that came out of nowhere.  And that's good.  That's bad if you're a plant producer or a hazelnut grower 'cause you have too much diversity.  It's great if you're a breeder 'cause you know you've got diversity to select from.   Some plantings are more well-maintained, and the plants start to look a little more similar, but when you start looking at the nuts, the nuts look very different like I showed in that earlier picture.  So what are after in our breeding objectives? Number one, we need a plant that's easy to propagate.  If we've got a plant that does really well, but we can't make copies of it so that you guys can grow it, it's a worthless plant at that point, so it's got to be easy to propagate.  It has to be winter-hardy and by that it's got to survive our winters.  American hazelnut doesn't die no matter what you do to it weatherwise. 

 It just keeps coming back, but the catkins and the female flowers need to be able to survive spring frost.  That's the problem primarily.  European hazelnuts will grow okay except in the harshest of winters, but the flowers will die every spring 'cause they flower so early.  When we talk winter-hardy, it's got to be both flowers and the plant itself.  Has to be resistant to Eastern Filbert Blight.  That blight has wiped out hazelnut production in British Colombia, and it almost wiped out hazelnut production in the Willamette Valley of Oregon once it jumped the Rockies 'cause it's not endemic to that region.  They've been able to find resistance in American hazelnut populations, and they went back to Europe to find a resistance there, and so they've been able to get improved varieties.  So in Oregon they were able to hang on with fungicides and pruning until they were able now.  That's why we're seeing this increase in planting.  They're replacing the old orchards and putting in new ones with resistant material. 

 We need consistently high kernel yield.  We need excellent kernel quality, and we're interested, like I said, in a compact shrub rather than a tree.  And ideally, this is a lot to try to do in a breeding program on a 17 year cycle, but we want to see a plant that has big bud mite resistance or nut weevil resistance.  Anyone who's collected wild hazelnuts, you'll see the little holes in the hazelnuts, and in the wild it could be the half the nuts.  That's the nut weevils.  When we get them in cultivated plantings out of the wild, we tend not to see it, but ultimately that will be our main insect pest.  So the question is, we've been doing these on-farm evaluations, we're starting to do some of the replications.  Do we have the genetic potential at least in these plantings to make a profitable industry? So are these hybrids any good? It's particularly this first selection.  So the way we went about this is we took a couple of different economic scenarios, and we looked at if you're getting paid a low price of $3. 30, sorry, I have the metric units here. 

 I was in Canada a couple weeks ago, or a while ago, and you know.   A low price, which would be kind of a commodity-based price, or if you're selling, say, at farmers market or to a specialty market, you get a higher price, so under that high price or low price scenario.  And then what kind of return are you looking for on your investment? So the corn soy model, it's somewhere in $100, $200 per acre range.  Depends on the year, of course.  May not make any money this year, but a few years ago it was a lot higher.  So return per acre and corn soy isn't that great compared to something like blueberry, which is much, much higher.  So if you're looking for that kind of return at a different price scenario, those are the different economic scenarios we're interested in.  So those are the heavy black lines going across.  That would be the pounds in shell per plant that we would need to be able to match that economic scenario.  So, for example, if we had a low price scenario and a low return, you expected a low return, we would have a plant that would work. 

 One plant that we found.  So this is about 800 different plant yields that we measured, individual plants over the years from different on-farms.  If you've got a low and if you're gonna sell for a low price and you expect a blueberry return, well, sorry, we don't have plants that can yield 18 pounds per plant yet, so it's not gonna work under that economic scenario.  If we start saying we're selling specialty crops, and we expect either a high return or a low return, well, it looks like we have the genetic potential, demonstrated genetic potential, for this to work under those economic scenarios.  So this is showing the different colored dots are the yields at that particular farm.  So we looked at the top producing plants at each of four farms, and you can see site makes a big difference as you might expect.  The purple farm doesn't do very well, the hazelnuts.  The green farm, the plants do a lot better.  And you can imagine the green farm is on nice Iowa soils, and the purple is on a terrible sandy site down in southwest Minnesota.   So the good news is we've got plants that have the potential to work in the upper Midwest, so that's good to know. 

 I'm not gonna go into too much detail here, but the important thing is that on average if you planted 100 plants of seedlings, 10 might be pretty good, 80 are okay, and 10 are garbage.  So if you take the average of all those, it's only about, in this kilograms of hectares, think of it pounds per acre, it's about the same thing, it's only about 280, 250 pounds per acre.  Nobody's making any money growing hazelnuts at that yield no matter what you're selling them for.  That's the average.  We know that, the growers know that.  Remember, they're growing data, not hazelnuts at this point.  You take the average annual yields of the 10 best plants at these sites, and now we're pushing yields that are competitive with the European hazelnut yields.  First generation hybrid selections.  That's why folks are so excited about these hazelnuts in the Upper Midwest.  It's 'cause the genetic potential is there. 

  So we need to find the select individuals, though, that can do that consistently and ideally have all these other traits that we want.  This is a St.  Paul planting taken a few years ago.  This is the Bayfield planting, a picture taken last year, and it just shows the number of individual plants we call accessions that are included at each of these trials, so I'm trying to get them located.  We have some smaller trials over Port Wing, and then the planting that you may have noticed out the door here that has the deer fence around it, that has hazelnuts in there as well.  Trying to find plants that do well in the sand up in Bayfield and well in the clay here by Ashland.  So this gives you some idea of what to expect from these hybrids.  So what this is, you're looking at the in-shell nuts, and you can see the variation in size.  These are, and the growers named their top plants.  And. 

. .   So, you know, some people give them a row.  This must be Gibson row 2, plant 30.   Pebbles, this is one from a family, and their kids have named all their top plants, so that's Pebbles, right.  Okay.  So this is, you see the range in the in-shell quality.  You can see this, the range in the shell thickness, and then you can see the range in the kernel.  Some plants in this particular year at this site, the nuts didn't form.  They were all shriveled up. 

 Others have a fairly thick pellicle.  That's that kind of woody coating on the outside of the nut.  That's why you blanch or roast the nuts to turn them white.  Pebbles is a pretty nice-looking nut.  It comes out nice and clean, really no further processing required.  So it gives you some idea of the range that we see, which is good.  We want to see a lot of diversity in these plantings.  This, from last year at the St.  Paul and Bayfield site, these are the top plants, the top.  I'm just gonna show five plants. 

 And a couple of things to point out.  One, the kernels are starting to look pretty nice, and you can see some of these are, they're still smaller than a European hazelnut kernel, but they're looking okay.  But you also see the difference in size among the sites.  So here's this Eric 4-21 plant.  At St.  Paul, a little lower growing, or a longer growing season.  Better soils.  That nut fill is great.  At Bayfield, we just don't have the long enough season to fill those nuts, so that's why these replicated performance trials are so important.  It's so that we can know how each of these perform across a range of environments. 

 So 4-21 may not work for Bayfield, but it would likely work for St.  Paul.   Here's a picture of 4-21 to give you some idea of what it might look like.  It kind of looks like an American hazelnut even though it's a hybrid, right? This is the fourth year, which is about right for when the hazelnuts start to produce.  And this was taken last year.  This year I was up there just a week ago, and those branches are already on the ground.  They're still loaded with nuts.  So they've done it two years in a row, well, three years in a row, but year four and five, they're really looking nice.  A lot of nuts that are being produced, and if the quality is there, we may have something So this is one that we're going to vegatatively propagate and get out to growers for a wider evaluation.  It's not ready for commercial release, but it is ready for folks to evaluate it. 

 So I mentioned that we're trying to empower growers to participate in this process, and one thing that we've done is set up a program where they can collect data on their own plants that they like and enter it in this program to keep track of their own data and also to share it with us so that we can more effectively screen all these.  We don't have time to go out and visit 200 plantings a year, so we rely on growers to do some of this data collection for us.   So what's next with the hybrids? We wanna continue to do the evaluation, and we're ready to start getting material out to growers hopefully by fall of next year for evaluation.  And I'm gonna make, even though I work statewide, when this project really started up here in northern Wisconsin, so I wanna make sure growers in our region can participate in this program and be in the early stages.  I'm gonna skip some of this in interest in time.  So the other plant population that we're working with is pure American hazelnut, and this is exciting because it really has never been explored.  The hybrid hazelnut breeding program that's been going on since the 1930s has relied on two plants of American called Winkler and Rush.  That's it, just two plants.  You go to any one site, and we're talking two million different shrubs, and no one's really ever looked at that population, so we've got this treasure trove.  The way I think of it, you've probably heard of potatoes in Peru. 

 Peru is the genetic epicenter of potatoes, and so when breeders want new germplasm, they go to Peru to find wild stuff.  The same thing applies here.  If we want new genes, new traits, we're gonna go to northern Bayfield County and go look for them 'cause that's where all the hazelnuts are.  This is auto stop 16 in the pine barrens, looking out over the field, and as you can see, hazelnut's a dominant shrub.   So what we've been doing since 2009 is we go through a site like that, and we'll have a roll of flagging, and we'll just visually walk through and screen the plants.  We'll look for the top plants visually.  If we find one we like, we'll tie a ribbon on it, take a GPS point on it.  So we do that so we get 100 plants.  Then we all meet back at the car and we, 'cause we gave it a visual ranking, and we take the top 10 that we scored.  We go back to the plant and harvest all those nuts, weigh them so we know what that plant can produce. 

 So we've done that at 35 sites all across Wisconsin, primarily in the sandy areas.  We've add a bunch more over Marinette, Florence County, and then we also have a bunch of sites over in Minnesota that we've done, so we're over 50 some sites that we've screened so far.  We've identified 57 of those top plants, and we haven't quite figured out propagation on these American hazelnuts, so we dig half of the plant, we leave half there, and we dig the other half and bring it back.  And they're at Bayfield, so we have 57 of them archived up in the Bayfield planting that we think are some of these top performing American hazelnut plants, and then 17 of them we've decided are worth further evaluation at this point, so those are being propagated to be put back into these replicated trials so we can see what pure American hazelnut can do.  Most likely, we'll use it as parents in a breeding program, cross it with some of these hybrids or with European hazelnuts to have a broader germplasm pool.  And some these yields are pretty amazing.  This is an American hazelnut down by Barnes, and the nut production is almost as good as the hybrids.  And if you extrapolate it to a per acre basis, this is equivalent to what a European orchard might do.  So the nut production is there.  Is the kernel quality there? We don't know yet, but the genetic potential is there. 

  The other exciting part is what the oils look like.  So we took these American hazelnut samples and sent them over to UW-Superior where they have a lab that they can analyze the oil.  And we're primarily interested in oleic acid.  It's a monounsaturated fatty acid.  It's the healthy oil that's in olive oil.  And if you look at the yield, those kernels are roughly 60% yield by weight, or oil by weight, which is a lot.  So when you're eating hazelnut, you're eating hazelnut oil.  Right? So C18-1, that is oleic acid, and you see it's fairly consistent across these different varieties, about 80%.  If you compare it to other oils, it's higher than olive oil, so we call it the northern olive oil.  That means it's really good for you, it means it tastes really good, and it means it makes really good biodiesel if we ever get to a point where we need hazelnuts for biodiesel. 

 So what else are we doing? This is the old Hayward State Nursery that folks have been trying to close, and we're trying to not let them close it by using it, so we are collecting seed from all these top plants and just growing out big populations at the Hayward State Tree Nursery.  You can barely see them out there 'cause they're really small.  We just planted them last fall.  So this will be, the DNR is excited 'cause they'll be able to harvest seed in their plant production programs, and we're excited because we've got great space to be able to evaluate a lot of plants.  And they want nothing more than to be able to grow stuff like this again at Hayward, so we're happy to help.   I'm gonna end today with just a couple of comments about the industry itself and some of the work we're doing to enable folks to process these hazelnuts.  At this point, the in-shell nuts are too small.  You're not gonna sell in-shell nuts.  Particularly if you're putting them next to the Oregon grown, European hazelnuts.  These are half the size of those at this point. 

 Instead, we're interested in kernels, and at first we thought, when we started out, we thought, "How are we ever gonna get these kernels big enough "for consumers to wanna buy them?" 'cause they're so small compared to the European hazelnuts.  Well, we had folks from Fisher Nuts in Chicago come to one of our earlier conferences, and we were talking about this problem.  She stood up and said, "No, this is exactly what we want.  "We want smaller nuts.  "We want small kernels 'cause they work better in granola.  "They work better in trail mixes.  "They work better in confections.  "They work better in everything. " These big jumbo European hazelnuts, they have to chop them up, slice them up, and apparently consumers don't like them as much.  So, plus, if you're making processed goods, you don't care the size of the nut. 

 You care about how much kernel per acre, right? So just like that, we solved the problem, so now we call Midwest Miniatures, right? (audience laughs) And they taste great, right? We think it's better fit to a consumer or American palette because we're used to eating peanuts.  They're about the same size as a peanut, so you just grab a handful of hazelnuts or a handful of peanuts.  We suspect growers, were encouraged to look right away at value-added products.  When you're starting out with small yields, remember that profit triangle that Zen talked about, so they're gonna have to get higher margin for their product in order to get the profit where they need it 'cause they don't have the volume.  So turning in high value products is one way to do that.  Spreadable nut butters, so Nutella makes hazelnut spread.  Have you ever looked at the ingredients in Nutella? You probably shouldn't.  There's a little bit of hazelnut and a lot of palm oil and a lot of sugar.  Well, that creates an opportunity for health conscious consumers to say, "Well, you like Nutella, but I've got a product "that has hazelnut in it actually instead of a little bit. " So spreadable nut butters, they're gonna cost more, and Nutella's already expensive, but if you like that, then that's likely what they'll be making. 

 When you squeeze the oil out, you'll have flours.  It's gluten-free for folks, and it's tasty stuff too, especially when it's roasted.  So it's definitely a multi-use crop, and that's great if you're growing a new crop to have multiple outlets from a marketing standpoint.  It just creates a more nimble and marketable product.   Like I talked about earlier, these spreads are great because they're doing all the marketing and consumer awareness building that's so, it's such a hard part of any new industry is to build consumer awareness.  Well, the big boys are doing it for us, so that's great.  Have at it.  The other part that's happening that's really driving especially small scale production is consumers increasingly want a face to their food.  They want a place to their food.  And I talk about this food system pendulum. 

 We've gone to high efficiency production, but folks will say that it's nameless, tasteless, placeless, so they're looking for something more genuine.  And so this creates an opportunity for smaller producers to get their product in front of the consumers, and if it's good, they'll sell it.  This may be a fad, but for right now, it's an opportunity to get product in front of people, in front of consumers.  So we've got to figure out how to build this industry.  If all these little growers start competing with each other for the same little markets, everybody loses, so what we're trying to do is help them, and they're actually coming to us saying, "We want to work together.  "How do we do it?" Perfect job for extension.  So what we've helped them launch is a grower-owned processing business called the American Hazelnut Company.  It was formally launched in 2014, though it took us about three years to get it all figured out, and it's in phase one.  So phase one is to start to build the processing infrastructure and get it to a point where they can better understand the costs of production.  I like to call it a business that cannot fail because the reason is they know up front going into this that phase one, they're figuring out the processing equipment. 

 If it looks like they can't make money processing hazelnuts, they don't care because now they have equipment that they can use for their hobby.  Remember, all of them starting out are early adopter hobby growers.  They didn't have processing equipment before this project, and now they do.  So the hope, though, of course, is that they get to this other stage where they're aggregating product and using that pool volume to access markets and share costs so that they can be more efficient.  Just quickly going through the harvest process.  This is what the product would look like after you 'cause they, in Europe the nuts fall out of the husk, and you just sweep them up off the ground.  In our case, we pick the clusters off, those green things that I showed.  They're starting to dry when you harvest them, but you've got to dry them all the way so then you can grind them up to take that husk off.  And growers are pretty ingenious.  They've built this stuff in their garage. 

 This equipment exists at the scale of European production, but nobody's going to spend $200,000 for a husker, so they build it for blood, sweat, and tears, and couple bucks.  And this is a barrel husker.  Works just like the other huskers do, and you can run it off a Shop Vac and a 110 outlet.  Here's a little higher end called the Super Squirrel.  This was one that was designed by students at the University of Nebraska.  And this is one that I was involved in designing called the X2000 Husker.  I've always wanted to name something the X2000 finally.  So you load the hazelnuts in the top.  It's nothing more than a glorified barrel husker, so they bang around in here in a cylinder, they come across an air column, blows off the chaff, and out come the nuts.  It works passably well. 

 Now you've got those in-shell nuts.  You got to get them size sorted so you can crack them.  And, again, the growers led the way.  They built these prototype roller sizers.  And here's another one.  Nothing fancy, and they work just fine, but they're not food grade, so we had to get it to that step.  So we haven't named this one, but this was with help from engineers from UW-Madison.  It's a roller sizer, so the nuts start out in this hopper.  They fall down here, and there's cylinders that spin like this parallel to each other that that gradually get farther apart as it goes, so as the nuts travel down that gap between the rollers, they drop out when they hit that size.  So we can size them into 12 size classes. 

 And here's a picture of what it would look like.  They travel down this channel and get sized as they go.  Now you've got sorted nuts 'cause the way you crack nuts is you basically put them through a machine that goes like this, so that space has to match the nut.  So that squeezes the nut just enough 'til it cracks without crushing it.  So it's size dependent, that's why we sort them into those size classes.  And we found a, instead of building a fancy one, we found a $500 drill cracker that somebody made for walnuts online.  Turns out it works great for hazelnuts and has about a 200 pound per hour throughput, which is more than adequate for the scale of production we're at right now.  So then the other thing, once you've got the cracked hazelnut, you've got a mix of kernel and shell fragments.  You got to get rid of the shell fragments, so you run it through an aspirator.  Again, growers led the way. 

 They bought a dust vacuum here for 200 bucks.  They bought a cyclone.  And you just pull the air through this system, and the nuts drop into this column, and all the light stuff gets pulled off by the vacuum, and the heavy nuts fall out the bottom.  Pretty slick.  So we had to make it food grade and improve some delivery and this kind of thing.  So here's the Badger Aspirator.  We just got delivery of this about a week ago, again, with help from an engineering professor down in Madison.  So they have the equipment.  They're ready to roll, and they'll have their first cracking party in two weeks where they'll run their 2014 hazelnut crop and start making oils and spreads and butters and whatever else they're gonna do.  Just to give you some idea of scale, here's a hazelnut processor in Oregon, and it's the same equipment. 

 It's just a different scale.  It looks a little different, but these are cyclones with sorting equipment.  And this is the plant that processes about 40% of the Oregon hazelnut crop.  Looks a little different, but it's the same basic equipment.  It's just different scale.  And at the end of any nut processing, there's a crew sitting on either side of a conveyor belt doing the final hand sort.  Despite all this fancy equipment at the most modern plant, there's still a hand crew at the end doing the final hand sort.   So that's what we're after, that's we've got, and we think we're on our way, so it's exciting times in the hazelnut world for sure.  Where I see this industry in five years is this grower-owned processing company will be up and running.  Likely, there will be more than one company because we've got such a big geographic area that we're working with. 

 We'll see rapid increase in average yields as the full sibling seedlings mature.  That's from the controlled crosses, and then hopefully soon we'll have these clonal material out for trial, and that's where we'll really see a big increase in average yields across the Midwest landscape.  So if you wanna learn more about hazelnuts, definitely recommend you go to midwesthazelnuts. org.  There's about a 12 minute video that really goes into some good depth and a lot of good footage of the American Hazelnut Company and also the hazelnut industry as a whole.  So any questions? (audience applause)  - Good evening, everyone.