Chilean Chestnuts: Studying the South

Chestnuts are grown across the globe, from Japan to Minnesota to Florida to The Canary Islands to Turkey. Take a moment to appreciate how diverse those climates are. We at Propagate Ventures are focused on the cold, humid climates of the Northeast and Midwest United States, frankly because this is our home. The salad economy produces large amounts of nutritious greens, but if we only ate kale, we would be very thin. Consequently, we must ask, “Where do our calories come from?” Does the cultivation of our carbohydrates, proteins, and fats improve or degrade the land? Chestnuts are a calorie-dense, carbohydrate-rich nut, the production of which improves soil and sequesters carbon. Today, we’d like to discuss chestnut cultivation in Chile. While our own climate and that of central Chile are not identical, they are indeed similar. More importantly, the story, context, and success of a group of Chilean chestnut growers is most interesting to us.

Chestnuts and pasture, Chile source

Chestnuts and pasture, Chile source

Vivero Austral is Chile’s chestnut and walnut incubator. In the year 2000, entrepreneur Edmundo Valderrama and agronomist Pedro Halcartegaray set out to pioneer the growing, processing, and marketing of chestnuts to satisfy the Northern Hemisphere’s off-season demand. Their information, that we present here, is available in Spanish and is cited throughout. First, we’ll walk through the background information of the Chilean Chestnut industry. We’ll then go into technical details for aspiring growers and farm designers. Finally we will present implications and next steps for cultivation in the United States. We’d like you to walk away with the idea that we can grow chestnut trees and other crops, namely cereal grains or pastured livestock, on the same piece of land.

Chestnuts do well in Chile, and have been in South America for a very long time. They first arrived in the pockets of European Immigrants. This is not atypical: Chestnuts have been spread by humans for millennia. They can be found in all corners of the Holy Roman Empire, and that is not a coincidence. Those with organized foresight have always promoted this tree. At that, while home cultivation is fantastic, commercial cultivation is what we’re after. Chile presents climates analogous to those Baja California, Southern Alaska, and everything in between. Castanea sativa can grow as far north as Santiago, and as far south as Puerto Montt, but finds its sweet spot at 36-39 degrees south latitude in the region’s deep volcanic soils and good precipitation. This is to be expected, however: proverbially, anything would enjoy growing in these conditions.

Chestnut pollen map, 570 AD: production is still significant in Galicia, Italy, and Turkey.

Chestnut pollen map, 570 AD: production is still significant in Galicia, Italy, and Turkey.

Given this comparative advantage, the Chilean chestnut associates set out to establish chestnuts as an agricultural and commercial cornerstone in the country. Vivero Austral grew the number of plantations and propagated vast amounts of nursery stock to supply that growth. In 2013, they could not keep up the demand for trees, and had to postpone their own plantings.

Vivero Austral also helps growers with site election, orchard design, plantation management, and employee training. No one in the region has global experience with chestnuts, and as innovators, they must bring all that is needed, from the trees themselves to the knowledge of how to prune for maximum yields. At the moment, their biggest constraint is processing. Added value chestnut products are the next frontier. We should ready ourselves for a chestnut craze within the next decade, and we should do so by planting trees now.

Yields and pruning: Technical Information.

What does profitability look like? How many pounds of chestnuts can we produce per acre? Quantity, quality, and consistency of management, like with any business, dictate profitability. If you plant a few trees and leave them alone, you’ll eventually get some nuts. If you plant trees at the correct spacing, mulch them, and prune them correctly, you’ll get more nuts, sooner. If you’re looking for a quick figure, 800 hectares of trees in Chile are on track to produce 4,400 tons of nuts. That amounts to 4,800 lbs. per acre. At a U.S. wholesale price of $3.40 per pound, this would result in $16,320 per acre. Retail prices are at $10 per pound, inferring a gross revenue of $48,000 per acre.

Let us discuss the drivers of yield. First and foremost, take a moment to understand the following concept: trees produce nuts on the ends of their branches, and if we optimize the shape and surface area of the tree, we maximize nut production. The following photos from castanea.cl clarify this concept.

These trees are properly pruned. Their triangular shape maximizes the amount of branch tips that have access to light: nuts form on the ends of a tree's branches. Source

These trees are properly pruned. Their triangular shape maximizes the amount of branch tips that have access to light: nuts form on the ends of a tree's branches. Source

This tree is properly pruned. Notice the quantity of burrs. Source

This tree is properly pruned. Notice the quantity of burrs. Source

When trees are not pruned, but planted close together, they compete for light, and crowd each other out. The wood on the bottom branches of these trees will not produce nuts. Source

When trees are not pruned, but planted close together, they compete for light, and crowd each other out. The wood on the bottom branches of these trees will not produce nuts. Source

This orchard is crowded out, and production has dropped drastically. Source

This orchard is crowded out, and production has dropped drastically. Source

These trees are properly pruned, and this plantation is highly productive. If you're concerned about the monocultural nature of the plantation, bear with us. Perennial polycultures are fantastic, but for the time being, we're just discussing chestnuts. We're on the same page. Source

These trees are properly pruned, and this plantation is highly productive. If you're concerned about the monocultural nature of the plantation, bear with us. Perennial polycultures are fantastic, but for the time being, we're just discussing chestnuts. We're on the same page. Source

If you'd like to see additional photos, click through the slide show at the bottom of this linked webpage.

Consequently, we must optimize tree shape and the distance between tree centers (the trunk). Shape is discussed visually, above. Distance between tree trunks must correspond with management. If we plant a chestnut system at a very wide spacing of 50 ft. between trees and 60 ft. between rows of trees, we can take a slightly more hands-off approach to management, because the trees are unlikely to ever crowd each other out, in that they will not compete for light, resulting in the death of lower branches due to shade. In spite of this, low-density systems do not reach peak production for at least 20 years: fewer large trees will produce similar nut quantities to a greater number of smaller trees, but it will take less time for a decidedly small tree to reach full size. Wide spacing would seem to be a good option for a silvopasture, where the landowner’s context does not suggest intensive nut production.

Moderate-density systems, planted at 25 feet between trees and 35 feet between rows will reach peak production sooner, but production will then rapidly decline as the trees compete for light and crowd each other out. Corrective, proactive pruning corrects for this, but neglect will nullify years of effort. Orchards can be planted at a spacing of 16-ft. between trees and 22 feet between rows, but intensive pruning and management are required. Systems like these are popular in China, where labor is less expensive. In short, the more time a manager contributes to a system, the greater yields he or she can achieve. Finding that point of equilibrium, based on a manager’s context and goals, is paramount.

Commercial production in the United States, at sites we at Propagate Ventures visited in Iowa and Ohio, for all intents and purposes aligned with a moderate spacing of 20 feet between centers. At our current level of information gathering, this is what we would recommend aspiring producers base their assumptions on.

Young trees in the foreground, and mature trees in the background at Red Fern Farm in Wapello, Iowa.

Young trees in the foreground, and mature trees in the background at Red Fern Farm in Wapello, Iowa.

Jeremy next to a mature chestnut tree, loaded with nuts, also at Red Fern Farm in Wapello, Iowa.

Jeremy next to a mature chestnut tree, loaded with nuts, also at Red Fern Farm in Wapello, Iowa.

Additional technical data that we’ve found useful from the Chilean literature is as follows. At about 20 hectares, or 50 acres of cultivation, mechanized harvesting and peeling in Chile become economical. Labor may be less expensive in Chile, shrinking the corresponding acreage in the United States. At 600,000 lbs. of yield, chestnut flour production and other processing started to make economic sense, in Chile.

The greatest threat to chestnut production in Chile and across the globe, is the Chestnut blight. The blight is a parasitic fungus that is known for wiping out the American Chestnut. It is currently ravaging europe, and cutting yields in half. The trees in Chile are European chestnuts, Castanea sativa, and they are not blight-resistant. Chile is currently blight-free, but if we can learn anything from the bad choices of human history, namely the anthropogenic spread of the chestnut blight throughout the northern hemisphere, we would suggest that global chestnut breeders prioritize a blight-resistant European chestnut variety for Chile, Italy, Spain, the U.S., and the rest of the world.

In addition to the information and analysis that we’ve walked you through thus far, we’d like you to take a moment with the following two photos.

Rows of chestnut trees in Chile, intercropped with pasture. Source.

Rows of chestnut trees in Chile, intercropped with pasture. Source.

Chestnuts alley cropped with pasture in Chile. What yields, in between the rows of trees, would be best for your context? Source

Chestnuts alley cropped with pasture in Chile. What yields, in between the rows of trees, would be best for your context? Source

The biggest hurdle in establishing a chestnut orchard is the lack of early-year cash-flow from the trees themselves. If Americans thought on 10-year time horizons, we would plant a lot more fruit and nut trees. Unfortunately, we must compensate for this age of instant-gratification with monetary yields from in between the rows.

The net present value of a chestnut system, over 30 years, presents a fantastic IRR of around 20%. However, we aren’t blind to the fact that financiers don’t operate on that kind of time scale, given the uncertainty of a crop that is not currently mainstream. Chestnuts trees can be intercropped with organic soybeans or other small grains, vegetables, or pastured livestock. If we only expect the chestnut annuity (future yields) to account for the land that the physical tree occupies, and not the spaces in between the rows, our job becomes much easier. The photo below is poplar, alley cropped with wheat in Southern France. The system exhibits a myriad of benefits that we need not go into right now.

Alley cropped poplar and wheat in Southern France; Denis Flores Agroforestry

Alley cropped poplar and wheat in Southern France; Denis Flores Agroforestry

Chestnuts have enormous potential: from conventional corn farmers to chemical-averse grass-fed beef farmers, we’ve seen keen interest in incorporating rows of chestnuts into existing operations. Let us mimic the Chileans, produce regenerative, healthy carbohydrates, and create something that may very well outlive ourselves.

A Taste for Chestnuts and a Perennial Legacy

A Taste for Chestnuts

In Iowa, Jeremy and I bought a 25-lb bag of chestnuts, and we began eating them daily. You’ve likely never had a chestnut, but let us assure you that they taste great both raw and cooked. At one point, they took on a flavor of maple syrup, sweet corn, or “sugar snap peas with a hint of butterscotch.” I, Harry, run a lot of miles and consume a lot of calories. Let me assure you that eating a few chestnuts is unquestionably satisfying. I would compare it to eating a pre-packaged Clif Bar. Chestnuts are the only nut that is high in carbohydrate, and they can be used to make pancakes, pastas, crepes, breads, and even smoothies. Let me assure you that they are not a hyped-up wild food crop, rendered inaccessible by a need for extensive processing. If our work is successful, chestnuts will be the next hummus: a food that in 1980 was largely consumed by immigrants and fringe vegetarians but is now a staple in households across the nation.

Sustenance from trees: is there anything more sustainable?

Sustenance from trees: is there anything more sustainable?

A Perennial Legacy

In the 1950’s, Greg Miller’s father planted a Chestnut orchard. A few years later, Wes Jackson of The Land Institute said to a room full of young masters students, “I’ve got the herbaceous perennials. One of you has to take the woodies.” Greg Miller was in that room, and said to himself, “I think he’s talking to me.”

"I planted these trees when I was a junior in high school, in 1972." Greg and Jeremy walk through the Rt. 9 orchard.

"I planted these trees when I was a junior in high school, in 1972." Greg and Jeremy walk through the Rt. 9 orchard.

The Land Institute invented perennial wheat. This is what Mr. Jackson was referring to with the words “herbaceous perennials.” Perennial wheat does not yield nearly as much as annual wheat, but heads of maize were once as thick as a pencil: let us not fear uncertainty and simply, time. “Woody perennials” are simply trees and shrubs. Today we are interested in those that produce staple food crops, namely chestnuts.

Greg Miller is now 60 years old. He runs The Rt. 9 Chestnut Cooperative in Carrollton, Ohio. They have the capacity to process 200,000 lbs of chestnuts annually, and provide real, perennial sustenance to real people. He is a firm believer in sharing information, and we’d like to share a bit of his insight today. If Millennials do not take on careers in agriculture, income from agriculture will continue to consolidate in the hands of large multinational corporations that seek to sell us nutrient-poor, irresponsibly-produced food.

Are you familiar with the cork oak dehesa in Spain that feeds the pigs that yield the famous "jamón Ibérico de bellota?" The resemblance of the Rt. 9 Cooperative, to the Dehesa, was astounding. It is said that Ulysses, once disguised in rags on his return to Ithaca, encountered a pig farmer than tended his herd beneath the cork oaks. It is generally wise to mimic systems that have worked for Millennia. 

Are you familiar with the cork oak dehesa in Spain that feeds the pigs that yield the famous "jamón Ibérico de bellota?" The resemblance of the Rt. 9 Cooperative, to the Dehesa, was astounding. It is said that Ulysses, once disguised in rags on his return to Ithaca, encountered a pig farmer than tended his herd beneath the cork oaks. It is generally wise to mimic systems that have worked for Millennia. 

Let us start out by reiterating that the current demand for chestnuts vastly exceeds the supply. Koreans and Chinese from New York City once offered to buy everything Greg has, but as the number of buyers increased, so too has Greg’s bargaining power. The demand for chestnuts comes almost exclusively from immigrants that grew up with a chestnut culture outside the United States. Bosnians are quite fond of Chestnuts, and at Red Fern Farm, in Iowa, we met a family that had driven 6 hours from Minneapolis to pick nuts by hand. Critics might suggest that chestnuts are a novelty, but we strongly disagree: we see an enormous latent demand for the crop. In non-economic terms, this is to say, “you don’t know what you’re missing.”

Black Locust Silvopasture: 30 years of experience & 30 years of projections

In Watkins Glen, New York, 45 minutes from Ithaca, is Angus Glen Farm. Here, the Chedzoy Family runs 100 head of cattle over 310 acres of pasture and silvopasture. Brett Chedzoy, in addition to working with Cornell Extension, manages the land’s beef herd and forestry enterprises. Brett’s background is in forestry, but he is both a forester and a grazier. Brett met his wife, Maria, in Argentina, while working with the Peace Corps. He returned to the U.S. with silvopasture techniques from down south. We'd like to extend our thanks to Brett for walking us around his farm, and being incredibly open with his successes and failures over the past 30 years.

Well-managed silvopasture does not consist of running pigs in the woods, but should be thought of as holistic planned grazing under an established canopy or in between rows of trees in a plantation. Animals must be quickly rotated through partially-shaded paddocks, such that their impact does not disturb the trees’ root systems. If pigs or cattle are left in the woods for too long, they will compact the trees roots and slowly kill the canopy. At that, the trees will not show signs of stress until they are already on their deathbeds, and it is very difficult to bring them back to health once they have been damaged. Brett runs 100,000 lbs. of cattle (100 animals or so), through 110 permanent paddocks. His paddocks are fenced with high-tensile wire. He grazes the animals for eight months of the year, and bale-grazes them for another four. Bale grazing consists of feeding animals hay on dormant paddocks in the winter. Living barns of thick conifer trees protect the cattle from cold winds in the winter. The 2016 summer drought was not an issue for Brett, because the trees in his pastures held onto the winter’s moisture.

A black walnut and black locust plantation, managed as a silvopasture

A black walnut and black locust plantation, managed as a silvopasture

Many years ago, Brett planted a black walnut plantation on this family’s land, and included black locust as a nitrogen-fixing nurse crop that would provide an interim yield. Black locust is a very dense, rot-resistant wood that is used for outdoor structures and fenceposts. Walnut takes an extremely long time to mature, and the discounted cash flow projections of a tree over 60 years, though they can certainly be modeled, require a great degree of faith in addition to what the numbers alone can provide. If more people thought on a 50 or 80-year timeframe, black walnut would be fantastic. It's the perfect get-rich-not-quick scheme. Alas, black locust's 15-year yield is much more approachable, and Brett is a strong proponent of the species.

Black walnut yields beautiful timber, and is often used as a veneer species. Cankers like this greatly decrease the industrial value of the tree, but for small-scale furniture making, they can give wood a great deal of character. Generic black walnut furniture is less exciting in today's market, while imperfect, interesting furniture is all the rage. 

Black walnut yields beautiful timber, and is often used as a veneer species. Cankers like this greatly decrease the industrial value of the tree, but for small-scale furniture making, they can give wood a great deal of character. Generic black walnut furniture is less exciting in today's market, while imperfect, interesting furniture is all the rage. 

 

Brett runs cattle in the understory to keep the brush down and turn it and the grass into soil, inside the gut of the animals. Thinnings of black locust at 16, 20, and 24 years have yielded 300 posts per acre. Access to markets and operations vary by site, but at $5 per post, this amounted to $1,500 per acre. Having gotten to know the nuances of silvopasture and forest edges, Brett now plants locust, lets it move into his pastures, and manages it for posts.

Angus Glen Farm was once a dairy farm. At the moment, conventional dairy farms are having a very tough go: costs of production for 100 lbs. of milk are 28% higher than the price it commands. Milk aggregators are dumping skim milk into manure pits, because market demand isn't strong enough to pull it onto supermarket shelves. Generation Y and Z don’t drink much milk anymore, and as a country, we drink 37% less milk than we did in 1970. (Washington Post, 2014) The (global) story of commodity farmers lacking differentiation and bargaining power is all too familiar. The main takeaway from the proverbial commodity solution manual is that farmers don’t need to derive more income from their commodity, but rather just need to derive more income. The solution to the dairy crisis is not necessarily to buy more milk, but rather to differentiate that milk and diversify farm yields in order to increase farmers’ bargaining power and financial security. Every farmer is different, and enjoys different facets of farming: there is no one-size-fits-all alleviate the hardship of the northeast dairy farm. At that, grass-fed beef, running in a planned silvopasture presents one approachable, financially sustainable and ecologically regenerative alternative or addition to conventional dairy.

By now, you’re likely dying for numbers. Given Brett’s experience, if he were to start over, he would recommend a grazed locust plantation at 8x10-ft spacing. Three rows of locust, 10 feet apart, would be interspersed with a fourth row of hardwoods or nut trees. The first and third rows of locusts would be thinned for pole wood after 15 years, and the second row would be removed as large hop-poles after 20 years. With the fourth row of chestnut trees, we phrased nut harvests in years 15-30 as a 15-year annuity. Discounting that along with the black locust yields, at an 8% cost of capital, yields a net present value, inclusive of installation and management costs, of $17,000 per acre, not including beef yields. If you’d like to know how we got there, contact us, and we’ll talk.

We at Propagate Ventures are not actively pursuing direct payments for carbon offsets and ecosystem services. Systems like these inherently sequester vast amounts of carbon per acre, while producing food. They yield marketable value in the form of timber and meat, and provide the positive externalities of carbon sequestration and ecosystem services.

 

The Good Life: Bring the People to the Farm

The Good Life Farm is located in Interlaken, New York, 20 miles north of Ithaca. Melissa Madden and Garrett Miller purchased 69 acres in 2008, and have created what is now an orchard, cidery, CSA, and grass-fed beef operation. They are known for growing flavorful, ugly apples, asian pears, and ginger. These unique flavors are showcased in the Finger Lakes Cider House, a sister business that is located on the farm. The farm grows salad greens biointensively, and runs a herd of grass-fed cattle. While these products may be “niche” to the mainstream, we view them as high-value, nutrient-dense food with a local market ready and able to match demand with their supply. The food that regenerative agriculture produces comes from healthy, living soil, and the resulting quality is unmatched. Quality commands a price premium, and The Good Life’s products are worth every penny: growing the best food soil can grow is a great business decision, and the process provides an excellent nutrient-ROI to the eater and to the farmer.

 

We’d like to discuss The Good Life Farm in the context of what a farm can and should be like. The Good Life produces a mix of micronutrient-dense crops and macronutrients. For the non-nutritionist, this means that they produce excellent fruits and vegetables, and also meat. Carbon-sequestering tree crops are a mainstay of the farm. Geese, ducks, chickens, and turkeys move in between the rows of trees and asparagus. Beef cattle graze the open pasture. When we eat at a restaurant, we utilize an intermediary that connects us with farms. The next frontier in restauranteering, however, is to bring the people directly to the farm. The Finger Lakes Cider House offers small plates during the week to accompany cider tasting, as well as a full dinner menu on Fridays. If we are to interact with the land in a new system of agriculture, we must frequent the places where our food comes from.

We had the chance to walk around The Good Life Farm, and we’d like to show you some photos from their operation. The farm is unique, clean, and well-managed. The Good Life Farm is a beautiful showcase of what is possible in regenerative agriculture.

Draft horses, apples, and high tunnels full of greens and ginger

Draft horses, apples, and high tunnels full of greens and ginger

Salad greens, weed-free in chocolate-cake soil

Salad greens, weed-free in chocolate-cake soil

Ginger, an otherwise tropical crop, is grown here in western New York

Ginger, an otherwise tropical crop, is grown here in western New York

Cider apples abound

Cider apples abound

The trees are planted in a Keyline pattern, which means that they are slightly off-contour, but still effectively eliminate soil erosion and increase the land's water-holding capacity.

The trees are planted in a Keyline pattern, which means that they are slightly off-contour, but still effectively eliminate soil erosion and increase the land's water-holding capacity.

Grass-fed, grass-finished beef

Grass-fed, grass-finished beef

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Asparagus in between rows of peach trees; The Finger Lakes Cider House

Asparagus in between rows of peach trees; The Finger Lakes Cider House

Geese graze the rows of asparagus in the off-season, keeping the weeds down and turning grass into fertilizer.

Geese graze the rows of asparagus in the off-season, keeping the weeds down and turning grass into fertilizer.

Where will the good farmers come (back) from? Green Fire Farm and a millennial's return to the land.

Imagine that your family runs a business, any business. You’ve grown up with your parents as your boss, and they’ve set the expectation that you will work for the business, no questions asked. You don’t necessarily enjoy the work, and you’re eager to move on and explore greater things. After you and your siblings move out of the house, your parents are left to wonder who will continue their legacy. Your siblings aren’t particularly interested in the business, but perhaps you, with the autonomy to turn the business into something that aligns with your life goals, would consider moving back home. This situation is all too common in family business. Today, we’ll be talking about family business through the lens of a dairy farm, turned multi-species, holistically-grazed silvopasture. Jacob Marty of Green Fire Farm, in Monticello, Wisconsin, runs cattle, pigs, laying hens, and sheep through his young silvopasture that was recently row-crop land. He sells directly to a network of health-conscious consumers.

Jacob's cattle eat grass for their entire lives. They are rotated to fresh pasture daily, such that they only eat the tips of the grass. The ends of the grass have the most energy, and help the cattle grow into healthy beasts. The slaughterhouse has a hard time believing that they are grass-finished because their fat content is on point.

Jacob's cattle eat grass for their entire lives. They are rotated to fresh pasture daily, such that they only eat the tips of the grass. The ends of the grass have the most energy, and help the cattle grow into healthy beasts. The slaughterhouse has a hard time believing that they are grass-finished because their fat content is on point.

Jacob is the sixth generation to work at Green Fire Farm. The farm recently sold its dairy herd, and Jacob’s father runs a heifer operation on half of the land. Heifers are young dairy cows that have not yet had a calf. Jacob grazes the other half, and is an extremely qualified farm manager. Half of this story is typical. Aging farmers across the northeast run dairy farms that are on the brink of exhaustion. The cost of producing 100 lbs of milk is current 28% higher than the price it commands: farmers across the nation are going out of business. What is so special here is Jacob’s desire to return to the farm. Jacob has a degree in wildlife ecology, and studied abroad in Denmark. He’s had the opportunity to pursue off-farm work, but has chosen to give back to his community. You see, when dairy margins are slim, and milk aggregators maintain buyer power over farmers, the value that is generated when we buy milk at the supermarket is pushed up the supply chain to large, consumer-facing corporations. When the price of a gallon of milk at the grocery store stays the same, but the price paid to farmers drops dramatically, the middlemen capture that value. Dairy Farmers of America, an aggregator, is currently facing a class-action lawsuit for anti-competitive practices and collusion. A system like this shrinks rural livelihoods and destroys communities, but Jacob has returned to his town to create value and bring money back to rural Wisconsin. We are of the opinion that dairy farms need not derive more income from dairy, but instead simply derive more income. If producing grass-fed beef makes more sense than producing commodity milk, this is what farms should explore.

There are hordes of millennials who claim that they wish to farm, but do these young people know what farming entails? Do they wish to be on call on Thanksgiving morning, ready to deal with animals in 33-degree rain? Do they want to be up at 3:00 am in July to harvest lettuce such that it doesn’t taste bitter? Do they understand that they have to be both incredible business people and great land managers to create a livelihood for themselves? Or do these millennials romanticize farming and just want to be outside? If the answer to the last question is “yes,” perhaps outdoor recreation or the National Park Service is a better career path than agriculture. Let us now emphasize why Jacob and his kind are worth paying attention to. He grew up farming, has had time away from the farm, and has returned to agriculture once again. It is people like Jacob that are worth our time, because they understand what it takes to be a farmer. Are there more children of dairy farmers that want to profitably work the land without wading through manure all day? There must be. There must be farm-family millennials that know that they want to return to the farm, and others that given chance to work for themselves, outside, while turning a profit, would jump at the chance. We must share Jacob’s story with these young people: as a society, we can foster a new generation of regenerative agrarians.

Mobile fencing allows Jacob to graze cattle, pigs, sheep, and laying hens between his rows of trees. Apples, pears, oaks, chestnuts are laid out in curving parallel rows that approximately follow the contour of the land.

Mobile fencing allows Jacob to graze cattle, pigs, sheep, and laying hens between his rows of trees. Apples, pears, oaks, chestnuts are laid out in curving parallel rows that approximately follow the contour of the land.

Chestnuts: A Regenerative Food Crop and The Next Health Craze

Propagate Ventures’ mission is to accelerate the widespread implementation of agroforestry in cold climates, via the establish of profitable tree crops. We envision highly productive, ecologically-sound landscapes that produce food, fuel, and fiber for humanity. 100 years ago, the United States had a booming chestnut economy. The American chestnut, castanea dentata, was an overstory species from Iowa to Northern Georgia, to Maine. In 1904, a parasitic fungus known as the “chestnut blight” arrived from Japan, and killed as estimated 4 billion trees. 100 years later, Chinese chestnuts and Chinese-American hybrids blight-resistant, but pure American chestnut stands are few and far between. Pure American chestnuts are beautiful, productive forest trees, but for our purposes, Chinese chestnuts are just as good, if not better for food production.

Red Fern Farm

Red Fern Farm is a 25-year-old chestnut orchard in Wapello, Iowa. Kathy Dice and Tom Wahl own and run the property. Jeremy and Harrison of Propagate Ventures recently visited the farm to learn about chestnut production. Tom Wahl is an ecologist by trade, and in 1990, saw and foresaw the ecological and culinary benefits of chestnuts in comparison to annual crops such as corn and soy. Often in the regenerative agriculture sphere, figureheads with productive farms like to speak loudly about their operations. Kathy and Tom are much more modest, but nonetheless run an extremely productive, profitable business that we should pay attention to.

For the farmers among us, we’d like to go through some of the nuances of chestnut production at Red Fern Farm. We’ll do so with photos.

A chestnut burr at Red Fern Farm

A chestnut burr at Red Fern Farm

Red Fern’s Chestnuts are planted at 20x20-ft spacing. Tom had interacted with wider and narrower spacing, and was certain that this was the best option for his context. In China, where labor laws are different to say the least, trees are planted at 3-ft spacing between trees and 7-ft spacing between rows. There, intensive management by hand is economically viable.

Chestnuts at wide spacing with 5-ft tree guards

Chestnuts at wide spacing with 5-ft tree guards

Chestnuts grow in burs until they are ripe and ready to be eaten. The burs open, and the chestnuts drop to the ground. At Red Fern Farm, Chestnuts are harvested off the ground with a tool called a “nut wizard” and also by hand.

Fallen chestnuts, ready to be harvested: they can be shaken from the tree, or picked up by hand or with a nut sweeper.

Fallen chestnuts, ready to be harvested: they can be shaken from the tree, or picked up by hand or with a nut sweeper.

Chestnuts are still a traditional food across south eastern Europe and temperate Asia. Bosnians refugees from the 1990’s drive hours to harvest hundreds of pounds of chestnuts by hand. Koreans and Chinese immigrants from the east coast order nuts online from Prairie Grove Chestnut Growers, an aggregator that we’ll soon walk you through.

Red Fern Farm, in addition to chestnuts, produces pawpaw, persimmon, aronia berry, and honeyberry. Pawpaw and persimmon must be eaten fresh, and cannot be stored unprocessed for a long period of time like apples are. Aronia and honeyberry are niche crops: aronia is a dark, nutrient-dense berry that must also be processed into juices and wines, and honeyberry is an edible honeysuckle, improved in Saskatchewan. It is effectively a blueberry that fruits in June, and we expect it to take off as a new crop across the northern United States.

The Present Value of Chestnuts

From multiple reputable sources, we’ve been provided with estimates of $10,000 per acre in chestnut revenue, after 12 years, depending on management. Treated as an ordinary annuity at a 6% discount rate, the present value of revenue from 30 acres over the next 30 years would amount to $3.3 million from only chestnuts. This of course does not take into account establishment and management costs, but something that we’ve found in our travels is that agroforestry and row cropping and/or grazing are far from mutually exclusive. Rows of chestnut trees can be planted in between rows of corn, and pastured poultry can be raised in between the rows of chestnuts. Below is a video of Jeremy and Harrison playing frisbee in a black walnut grove in Lafayette, Indiana. The possibilities are endless.

The Prairie Grove Chestnut Growers

Prairie Grove Chestnuts Growers is a mom and pop operation in Columbus, Junction, Iowa. They are an aggregator for chestnut growers in Iowa, Illinois, and Missouri. They ship all over the country, and are growing rapidly. They run a very straightforward, seasonal business. Work is done by hand, and nuts are sorted by size with a DIY-machine.

At present, Prairie Grove sells to immigrants and non anglo-saxon Americans who either experienced a chestnut culture in their youth or through family traditions. They consume, understand, and value chestnuts. Bosnians and Koreans drive six hours to buy chestnuts, and Chinese citizens of New York City order them online. Wholesale prices range from $3-4 per pound for 25-100 lbs of nuts, while upscale grocery stores in Iowa City stock local chestnuts for $10 per pound.

Chestnuts have a sweet, nutty flavor, and are high in carbohydrate. They are of course gluten-free, and can be eaten raw, boiled, or roasted. They have traditionally been processed into flour. We see opportunities for expansion in added-value chestnut products such as polenta, gnocchi, chestnut chocolate milk, crepes, and baked goods. The possibilities are endless.

Industry Attractiveness

Chestnuts are a very attractive industry. The Van Eeghen Group is a Dutch family that has been in business for over 300 years. They gain large market shares in niche products, and operate in that industry until just before the product becomes a commodity: they catch new trend waves, and ride them until just before they peak. Chestnuts are at the precipice of becoming a wave.  They are currently a niche product that will likely hit the mainstream in the next ten years. Chestnuts are the next coconut, and the supply isn’t nearly large enough to supply that kind of demand.

If demand were to spike, supplier power of existing orchards and aggregators would be large, due to low levels of supply. Carbohydrate-rich nuts are few, but substitutes include any type of gluten-free carbohydrate such as buckwheat or brown rice.

A U.S. chestnut industry would have to compete with Chinese and Italian producers, but producers of other tree crops (such as apples) must do the same. At the end of the day, we believe that the demand is about to spike, and that domestic supply isn’t nearly large enough to meet that demand.

Propagate Ventures cares deeply about ecosystem restoration, but that is not what we speak to: we promote profitable crops that inherently restore ecosystems. We create ecologically regenerative assets classes, and chestnuts are a mainstay of our investment strategy.

Black Walnut Timber: The 50 Year Crop

Black Walnut is one of the many asset crops that Propagate focuses on. It is a long term timber product and has a value added nut crop until it reaches timber maturity.

One of the best breeders of timber products is The Martell Research Forest at Purdue University. They breed superior black walnut genetics. These trees are often robust, straight, tall, and have grown quickly. However, when we take them out of the forest, we take their genetics out of the ecosystem. If we create forests full of inferior genetics, we compromise our ability to harvest superior timber trees in the future.

 

48 years ago, Purdue gathered seed from wild specimens that were already straight and disease-free and started breeding trees. Currently, they supply both grafted stock and seed stock from superior trees. Below are several photos from their plots.

Black timber also has understory cultivation potential which could include, commercial grain farming, grazing poultry and small ruminants, human recreation such as running trails, or even shiitake mushroom cultivation.

The environmental benefits of Black Walnut include:

  • Soil Erosion Control
  • Soil Building
  • Wildlife Habitat
  • Ground Water Infiltration
  • Water & Fertility Retention
  • Carbon Sequestration

Black walnuts are easily harvestable using tarps. They are used for a variety of products from dyes to abrasive spray. It's timber is amongst the most valued wood species that exists today.