Nut Tree Agroforestry

Where you find the money (2002)

To make money off a nut plantation, you need to do three things: make money off the land that isn't being used by the trees when they are young, make money off the nuts, then pocket a bit at the end when the timber harvest is done.

A 'bit at the end'? Well, yes. If a seedling costs you $2 to plant, 10 a year to weed, prune, protect against voles, etc., optimum harvest value is at 70 years, and commercial interest rate is 9%, then you need to get $1300 stumpage per tree just to break even. And, that $1300 leaves no allowance for risk of loss by ice storms or disease, for the risk that land values will increase by less than 9% per year, for taxes of any kind ...

It's the time between investment and return that is the killer with timber. So, the time to return must be reduced.

Ontario farm tax rate

There is another reason to want to ensure an early cash crop from your walnut plantation: municipal taxes. If you are a 'working farm' in Ontario, you pay only 25% of the taxes of a non-farm. A working farm is provincially defined as a contiguous property in receipt of $7000 gross for produce each year.

There is an Ontario Managed Forest Tax Incentive Program that offers the same result, but it's useless for nut orchards - it requires the planting of 400 seedlings per acre and the maintenance in perpetuity of 100 trees per acre (over 8" DBH) - far too many for sensible nut production. And, a government-approved forester has to review your site every 5 years, at your cost.

So, when planning your walnut orchard, make sure that you can meet the $7000 per year farm target for your whole property.

Further information on how to go about getting the farm property tax rate can be found at the website of the Ontario Federation of Agriculture. A one-time fee of $50 is charged, as well as an annual fee of $150. (This $150 is a tax in all but name, required to be paid by every person who grosses more than $7,000 in any one year from farm produce within Ontario. It goes to one of the three recognized farmers' unions in the province.) Since typical rural taxes (outside Ottawa) are in the range of $15 per acre, it's not worth it unless you have 20 acres or more.

However, if an already-registered farmer leases your entire property, you can get the farm tax rate even if the gross income from it is less than $7000. And, you don't have to pay the annual $150 - the farmer's $150 covers your land too. Gordon Wilkinson has done that near Clarence Creek - a local farmer rents his 36 acres for hay, and skirts his nut trees. Gordon only gets $10 per acre per year in rent - hay is a low-value crop - but he also gets the reduced taxes.

Black Walnuts

Beef with walnuts

One possible way of getting an immediate return on a black walnut orchard is raising beef between the rows of trees. There is little or no machinery cost involved. The cattle walk the crop off. They also mow the grass and fertilize it.

At HarperHill Farms near Butler, MO, located near the Kansas border in the west-central part of the state, this type of agroforestry system is being used. Steers weighing about 600 pounds are purchased in early April, just as the grass is greening up. They graze for about four months and are sold the first week of August. With a carefully designed rotational grazing system, the steers gain about 180 pounds over the period. There is a cushion of $20 per head because each steer has eliminated that much mowing cost. The grass returns to the necessary height for convenient mechanical harvest of hay by the first of September. Manure has essentially disappeared and doesn't hamper hay harvest. By selling the steers early in August, they miss the summer slump of no gains during hot weather. And, the odds of selling on good markets are increased. Price trend charts in the USA over the past 20 years indicate that feeder calf prices begin to fall off after the first week in August.

To keep the cattle from damaging the trees, especially when they are newly planted, an electric wire is strung along each side of the tree rows in a configuration that allows the cattle to graze more than one alley at a time. Once the trees grow to a height of 10 feet, the electric fencing is no longer needed. The steers tend to create a browse line under the trees about 5 feet high. The value of the final timber will be reduced by the damage done by stock rubbing against the bark once the electric fence is removed. The electric fence not only adds another direct cost but also requires that the protected area be mowed.

But, using 2002 slaughter steer prices of $112/cwt in April and $98 in August, you will barely break even in Canada using that method. (Sources: Saskatchewan Cattle Marketing Report, February 2002; Alberta Agricultural Marketing Manual - February, 1999) Dennis Martin, OMAFRA specialist on beef, confirms this, noting (private communication): "Last year [2001] lots of cattle purchased in the spring and sold in the fall had a spread of only $125 per head or less ... Typical gains are 250 lb, average pasture costs 35 per pound of gain".

Soy with walnuts

Several studies in the mid-USA have concluded that the optimal economics there for growing black walnut are realized with an initial spacing of about 10' in the row and 40' row spacing. By maturity, 3/4 of the trees have been removed selectively, leaving about 30 mature trees per acre. The trees are pruned for an 8' or 12' clear trunk for timber, then a full crown for nut production. (Garrett & Jones, Annual Report Northern Nut Growers Association 84:47-58 1993 & references therein) An intercrop is grown on the space between rows until the trees need it.

What is the best intercrop? To be best for the trees, it should require annual cultivation for weed control, but not after mid-August when the trees should start settling in for winter. It should not require the same food elements as the trees, and should make its growth later than when the trees make their most vigorous growth.

The source for the following is the Ontario Ministry of Agriculture Food and Rural Affairs (OMAFRA) cost estimates for 2002 exclusive of labour and land rental, and their province-wide average crop values over 1981-1997 converted to 2002 dollars. Costs of labour capable of being done by a farmer-owner are excluded. Acreages are for a fully planted acre. When used as an intercrop with walnut, the percentage of orchard area that can be intercropped begins at about 80% for the first year and decreases to zero at about 20 years.

Legumes are not planted until trees are at the height of their growth, and they don't begin to draw significantly on soil moisture and nutrients until trees have finished their spring growth. White beans and soy are the most planted in Ontario. They add nitrogen to the soil during growth, and the root systems are left in the soil to add humus for the trees. White beans cost about $230/acre to produce and yield $460 - net $230; soy costs about $170/acre and yields $370 - net $200. The total Ontario acreage planted in beans declined from 110,000 acres in 1981 to 60,000 in 1997, whereas that of soy climbed from 690,000 acres to 2,300,000 acres, making it second only to hay as Ontario's largest field crop. Clearly, Ontario farmers are finding soy a most useful crop overall.

Winter (soft) wheat costs $190 and yields $310 - net $120. Garrett & Jones consider it the best intercrop for the first 10-12 years of a walnut plantation, and state that it can occupy more land area during early plantation years, than warm season crops such as soy. But it is much less profitable here than soy according to OMAFRA data.

Grain corn (stalks left standing over the winter) is promoted by some as a nurse crop as well as intercrop. However, it requires its nourishment exactly when the young trees need it, and there are risks to the trees involved with the quantity of nitrogen and herbicide required by corn. Costs are $290/acre, yields $460 - net $170.

Acorn squash or pumpkin are other intercrops to consider, as they draw most nutrients late in the season, will use all the sunny portion of an orchard, and can be marketed wholesale or roadside (do it yourself). However, the trees must be higher than 2' or the vines will cover them. And, the squash field crop area in Ontario is so low that OMAFRA doesn't keep statistics on it.

So, the bottom line seems to be that the best intercrop for an Eastern Ontario walnut orchard is soy.

Selling walnuts

There are four major steps in selling fresh Ottawa nuts: collection, hulling, extraction of nut meats, and selling.

On a garage scale, black walnuts can be hulled underfoot at about 6 per minute (including the time to move them around and clean up). Wait until the nuts fall naturally or the squirrels pick them for you. Spread them out until the husks are dry. They will stain the surface, so pick a washable place. Then roll them underfoot until the husks fall off, on a driveway or similar surface you can hose down after. Use an old pair of shoes - they will get stained. Wash them under a hose nozzle, leave them spread out until dry, then keep them in the shell until eating time.

Splitting can be done by hand at about the same rate, probably a bit faster if a foot-operated edge were to be built. Meat extraction of split nuts is the slow bit, at best 2 per minute in my experience. (For many years, Hammons Products used rows of minimum-wage workers for meat-shell separation. Women who lived in rural Missouri would work their hearts out for that then, working at double the production rate I'm able to.) At today's Ontario minimum wage plus minimal commercial overhead ($15/hr gross), this works out to roughly $.20 per nut. With 400 meats to the kilo: $83/kg cost, excluding collection, transportation and sales. Out to lunch! Hammons sells premium selected nut meats on the web for Cdn$24/kg retail. (And, dare I mention that Chinese walnuts from California are available locally for $12/kg?)

What's the difference? Hammons now does everything except final inspection with machinery and electronic eyes. They get significant profit from the nut shells as a specialty abrasive and sell rejected meats for pig feed. Only a mass market for hulls has escaped them. As a result, they have outlasted every competitor, for over 50 years -their current sales of nut meats total 1½-2 million pounds annually.

Hammons notes that in many years they don't get as many nuts as they could market. Could we break even by shipping our walnuts to them? Well, not easily. Hammons pays only US$11/cwt after hulling, Cdn$.30/kg; 6% of the value of the final nut meats. Shipping to Missouri would kill us unless we could fill an 18-wheeler,

It is possible to sell black walnuts as a cottage industry. Gordon Wilkinson reports a store in Vancouver that was selling coffee beans excreted from forest elephants for $200 a pound! Cobjon has had some success with band-sawing the nuts into slices, which then separate easily; the shell cross-sections find a small market as ornamental items for crafters. But neither will sell walnuts by the ton. Neil Thomas already has 500 fruiting trees and hundreds more on the way. Besides, there are at least 50 bearing trees in the urban area of Ottawa whose owners consider them a fall nuisance, harder to clean up and throw out than leaves. They could easily be collected by anyone who had a viable way to prepare them for market.

Ernie Grimo of Niagara hulls and washes 150 bushels of nuts yearly in a modified cement mixer, sanitizes them in a weak bleach solution, then puts them in a homemade air dryer for a week. He cracks them with a modified grain mill, the type used by local Amish Mennonites. The cracked nuts are separated with 1/2 inch and 1/4 inch screens. The pieces that are too large to go through the 1/2 inch screen are cracked again, the material above the 1/4 inch screen contains most of the free kernels ready for sorting away the shell, while the material that goes through the 1/4 inch screen is sold for bird feed. The shell and meat mixture is dropped into a brine solution. The shell sinks while the oily nuts are buoyant and float. The kernels are washed in fresh water and then dried in a makeshift air dryer. A final hand sort is needed to remove the rest of the shell from the kernel. Ernie admits he doesn't make minimum wage doing it.

Is there any way out? Obviously, improve the economics of local shell-meat separation. Walnut trees are good for wildlife and for increasing biodiversity. But, for now it's mighty difficult to make money off them except by selling seedlings!

John Sankey