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.
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.
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.
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.
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.
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.
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.