November 8, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Based in Edmond, Oklahoma, and with field offices in Oregon and Oklahoma, Raptor Ag was founded in 2016 by company partner and CEO Chris Eubanks, along with Dustin Faulkner and Jason Perkins, with the initial goal of becoming the largest hazelnut producer in North America.  

The group focuses on high-quality land that includes significant water rights. It then adheres to intensive management strategies for its orchards, which are all on a drip line fertigation program overseen by its full-time operations staff.

Since its launch, the group has rapidly expanded, added pecan orchards to its holdings, all while gaining notable funding along the way. Over the course of a brief two-year period, Raptor Ag completed a series of deals with a range of institutional investors including family investment offices totaling approximately $60 million for the development, or the acquisition, of hazelnut orchards in Oregon, and pecan orchards in southern Oklahoma. 

Included in previously announced deals, the company successfully raised $27.3 million in July 2020, stating that this funding followed closely after an additional $7.5 million raised through a round backed by a single investment firm, and that it intended to close on another $6.1 million in the coming weeks.

And, as it continues to grow, Raptor Ag announced it has raised an additional $19 million in funding over the past 12 months, and has agreed to the formation of joint ventures in Chile and Italy – both major hazelnut growing countries where prices have been up to 260 percent higher than those in Oregon – with the role of directing farming operations and managing agronomic strategies, and the goal of replicating the large-scale development projects and exceptional yields achieved in the U.S. 

High prices and consumer enthusiasm have put a spotlight on the often-overshadowed hazelnut (we’re looking at you almonds), however, a key driver of growth for hazelnut production has been the introduction of resistant cultivars in the late 1990s and early 2000s. The release of a new variety developed through the natural breeding program at Oregon University called Jefferson is not susceptible to the Eastern Filbert Blight that attacks previous strains, and has been a factor in driving the state’s hazelnut industry into a period of growth.

Today, Raptor Ag is the largest hazelnut grower in the U.S. with more than 1,200 hectares (3,000 acres) of hazelnuts under management in Oregon. The company also gained recognition in the winter of 2017-2018 when it planted 404 hectares (1,000 acres) of high-density, irrigated hazelnuts – the largest planting by a single grower in the history of the North American hazelnut industry.

Additional plantings and acquisitions of established orchards followed. In 2021, the company first diversified into pecans in southern Oklahoma, establishing 421 hectares (1,040 acres) of high-density, irrigation orchards, which the company stated appears to be the largest single-season planting by a North American grower in the pecan industry. By February 2024, Raptor Ag expects to have a total 810 hectares (2,000 acres) of developed pecan orchards completed. 

Additionally, the Raptor Ag team of agronomists, horticulturalists, geologists, soil scientists, hydrologists, fabricators, and engineers have developed proprietary evapotranspiration models for hazelnuts; utilized various irrigation and oil moisture monitoring technologies; developed proprietary hedging methods for both hazelnuts and pecans; invented new types of pruning equipment; implemented precision ag and sustainability programs; operated their own drones for weekly remote sensing analysis; and more. 

Chile 

In Chile, Raptor Ag partnered with AgroAgama, a Chilean farm management company formed by U.S.-based Agama Partners, to form the joint venture Raptor Ag Chile. AgroAgama already has approximately 600 hectares (1,500 acres) of hazelnuts under management, providing Raptor Ag with an immediate foothold in the country.

Currently, Raptor Ag is conducting due diligence and investor pairing opportunities on approximately 700 hectares (1,730 acres) of hazelnut orchard acquisitions, and is considering opportunities to lease or custom manage several thousand more hectares of mostly hazelnuts, along with various other tree crops. 

“When it comes to hazelnuts in Chile, our agronomic team views the northern growing region of  Chile as possibly the best climate in the world for maximizing hazelnut yields and the species’ genetic potential,” said Chris Eubanks, CEO and Partner, Raptor Ag.

“The best growers in Chile  are already achieving yields far higher than the average for any country in the world. And the  orchards we’re looking to acquire, which all have great soil and water, come with existing  production contracts,” Eubanks continued. “These contracts help moderate the risk and volatility we’ve recently seen  in hazelnut markets. Quality farmland in Chile is also more affordable than the U.S.”

“Additionally, Raptor Ag, with assistance from AgroAgama, lobbied U.S. senators this summer to  ratify the income tax treaty that was signed 13 years ago but had not been ratified by Congress,” explained Eubanks.  

“Within weeks of our lobbying efforts, the treaty was approved and cleared for ratification, which passed by a vote of 95-2. The president is expected to sign it. The treaty provides numerous benefits to U.S. companies doing business in Chile, including reducing or eliminating taxation by  both countries.”

Italy

In Italy, Raptor Ag has partnered with Wollstone Capital for the establishment of Wollstone Raptor Ag. It was explained that Wollstone has recently secured a 15-year off-take agreement with a top confectionery company for the development of 1,500 hectares (3,700 acres) for which Wollstone has already begun ground preparation and initial plantings. 

Raptor Ag stated that it views off-take agreements with confectionery companies and other buyers as critical to the future financial success and potential expansion for the hazelnut industry. 

“We also really like the opportunity in Italy,” said Eubanks. “Farmland affordability, no corporate income tax, and an educated workforce can provide a great business environment for hazelnut  growers. The lengthy production contract also virtually assures profitability. For Central Italy, we  also believe the growing environment is better than Oregon – more direct sunlight hours, similar temperatures, and a drier harvest season.” 

In the U.S., growers sell their crop to processors, with recent prices far below cost of production – $.42/lb for Barcelona variety, and up to $.54/lb for other varieties. Meanwhile, contracts in Chile and Italy last season were for $1.10/lb for Barcelona, and $1.40/lb or more for other varieties. 

Raptor Ag stated that while it is committed to its operations in Oregon, these conditions have led to many growers abandoning or removing their orchards.

“There are orchards all over Oregon’s Willamette Valley right now that owners or operators simply quit managing or removed, because everyone is currently losing money,” said Eubanks.

“We believe the market will eventually rebound for U.S. growers, and it appears grower prices have already started improving a bit. But with rapidly increasing costs of labor, equipment, and inputs, contract pricing is beneficial to ensure grower profitability, industry expansion, and for buyers to secure consistent supplies. So we believe the off-take agreements offered to growers in other production regions is a savvy business decision by confectionery companies and other hazelnut buyers.” 

Eubanks continued, “Raptor Ag has already seen consistent ‘paid’ yields up to 4500-5500 lbs/acre (4490-6175 kg/ha) in its Oregon operation and on farms in Chile, and there is no reason why we can’t  duplicate that success in Italy. It appears the return profile for our investing partners – both current and future investing partners – in both Chile and Italy can be more attractive than U.S. hazelnut operations, even when grower prices rebound in the U.S.” 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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