I thought this might interest some folks. I recently received a paper penned by Jeremy Kaufman the Chief Operating Officer & Co-Founder of “Propagate”, an agroforestry investments and project development platform focused on bridging the capital and operational needs for the integration of tree crops to farmland. I thought this was worth sharing and might be a great opportunity for some who are interested.
Jeremy writes the following…
Producing chestnuts in the United States represents a significant opportunity for farmers to meet a growing and under-served demand. In 2022, the U.S. imported roughly 6.7 million pounds. That demand could easily be satisfied with domestic production, bringing substantial profit to U.S. farmers.
Through our work to date, we’ve discovered that chestnuts are the perfect complement for crops in agroforestry systems. They thrive in mixed farming environments, optimizing land use in terms of food production and profit. By integrating chestnut trees into existing crop systems, we can improve soil health, reduce erosion, and enhance overall farm resilience while introducing new income streams from the nuts.
In this post we’ll crack into the exciting, and rapidly growing market of chestnuts. We’ll explore why they are an ideal fit for the farm and why they present a tremendous opportunity for U.S producers. Additionally, we’ll share the lessons we’ve learned from collaborating with chestnut growers.
Understanding Markets & Meeting Demand
- Americans have a voracious appetite for chestnuts, consuming over 7.5 million pounds annually. The majority of these chestnuts are imported from countries like Italy, China, and Korea, creating a unique opportunity for American farmers to tap into the market. By growing chestnuts locally, farmers can meet this demand, reduce reliance on imports, and provide consumers with a higher-quality product.
- Beyond their dietary and ecosystem benefits, chestnuts are a smart investment. Investment data shows that the Internal Rate of Return (IRR) for establishing chestnut production is around 15%-25%, depending on retail-wholesale market ratios. In 2020, one farm we partnered with sold out of 60,000 pounds in just 24 hours through online sales — a remarkable achievement.
- Chestnuts are highly versatile and can be sold fresh, frozen, dried, or processed into various products. This diversity allows growers to explore multiple sales channels, including fresh produce markets, specialty food stores, and online sales platforms.
- Marketing chestnuts for their health benefits can be a winning strategy. These nutrient-packed nuts are low in fat and calories, naturally gluten-free, and appeal to an increasing number of health-conscious consumers. With their high fiber content, chestnuts aid digestion and provide a satisfying, guilt-free snack.
Chestnuts Thrive in Agroforestry Systems
- The economic prospect of chestnuts is compelling on its own. However, when considering the ecosystem benefits that come with agroforestry practices like alley cropping, it becomes a win-win for both farms and the environment.
- Integrating chestnut trees and perennial crops into systems like alley cropping, silvopasture or windbreaks offers a range of benefits compared to monoculture crops like corn or soy, including: improved soil health, improved water quality, improved pollinator habitat, sequesters carbon in tree growth
- Moreover, chestnut trees are known for their longevity, ensuring a stable source of income for future generations. By planting chestnut trees, farmers can create a lasting legacy that supports their families and preserves the agricultural heritage of their land.
Case Study: Investments in Chestnuts & Agroforestry
Hill Farms, Central, Ohio – In 2021, Keavin Hill, owner of Hill Farms in central Ohio, seized an opportunity to transition his farmland to chestnut and hay production. Historically, Keavin managed corn, soy, and wheat operations across his +/- 4,000 acres spanning southern Ohio and Northern Kentucky. Fast forward to 2023: By year-end, 60,000 trees will have been planted, making Hill Farms one of the largest chestnut operations in the U.S.
Funding is Critical for Adoption
With a compelling business case for profit, you may wonder why more farmers aren’t growing chestnuts. Designing, planting, and managing an agroforestry system with chestnuts requires capital expenditures and often entails taking existing crops out of production. These expenses, combined with potential profit losses, create a steep barrier to entry, making aspirations just out of reach.
Financial support is essential for farmers transitioning to agroforestry practices, as it covers initial investment costs, stabilizes income during the transition, promotes long-term sustainability, and facilitates education and skill development. Such funding not only benefits individual farmers but also contributes to the broader goals of sustainable agriculture and environmental conservation. Farms can tap into available funding through two main avenues:
The U.S. Department of Agriculture awarded $60 million to The Nature Conservancy, Propagate, and other partners to fund a 5-year project to advance agroforestry. These practices provide healthy, long-term agricultural production while reducing dependence on external inputs.
Propagate is part of a joint venture known as Agroforestry Partners, which raises funds from long-term investors to pay farmers upfront for transitioning their land to agroforestry systems. This venture manages these assets for both farmers and investors. Food and beverage corporations have also invested directly in American farms to promote regenerative practices. These businesses assist their suppliers in transitioning to regenerative agriculture to reduce scope 3 emissions and adopt sustainable land use practices.
Conclusions: The potential for chestnut production in the United States is vast. By capitalizing on the growing demand for chestnuts and the advantages of agroforestry, farmers can transition to a more sustainable and profitable farming model. This transition must be facilitated by public and private funding to overcome the financial barriers to adoption. In addition to financing, farmers can receive support with planning, design, and implementation for chestnut operations. Propagate and Agroforestry Partners are here to help farms seize the opportunities presented by chestnut production and take the first steps toward a profitable transition that will secure the future of their farms for generations to come.
Propagate provides comprehensive support for farms looking to incorporate chestnuts, from farm design and site preparation to procurement, tree planting and establishment, and tree crop agronomy. We’ve developed a Gold Standard for Chestnut Growing that our farm services team uses to ensure healthy and productive plantings. We help implement realistic, functional regenerative systems by connecting you to our genetic stock, equipment, and labor partners. Get a free, no-commitment assessment to understand how agroforestry practices could be implemented on your land today. Click HERE to visit the website and learn more.