ORIGINAL ARTICLE FROM: https://www.abc.net.au/news/rural/2023-02-27/macadamia-prices-drop-amid-global-glut/102003538?utm_source=abc_news_web&utm_medium=content_shared&utm_campaign=abc_news_web&utm_content=link
If you have never tasted a crisp creamy macadamia kernel, or it has been a while, Australian growers say now is a critical time to buy the native nut and help them weather a global glut and savage price cuts.
Key points:
- After record highs a few years ago the farmgate prices of macadamias are tumbling
- The price paid to growers is yet to translate to lower prices in supermarkets
- The industry’s future lies in further research and driving demand
The industry has been hard hit by a pandemic-driven dent in sales, rising inflation, and production outstripping demand after increased plantings here and overseas.
Australia’s 2023 harvest is about to begin and a record crop of 60,000 tonnes of nut-in-shell has been predicted.
From a record high of $6.20 per kilogram paid in 2020, farmgate prices tumbled to as little as $2.50 per kilogram late last year and could drop even lower.
But the price paid to growers is yet to translate to lower prices in supermarkets, where raw kernels retail for as much as $45 per kilogram.
Over more than 40 years of growing macadamias, industry veteran Lindsay Bryen has witnessed prices peak and then bottom out “three or four” times.
“It’s a cyclic price rise and fall for purchasing nuts, and it will bounce back,” Mr Bryen said.
“People have just got to stick to the industry and it’ll return to better times again.
Message for overcommitted growers
With macadamias representing less than 2 per cent of global tree nut consumption, livelihoods have been staked on more people discovering how tasty and healthy they are.
The nation’s 800 growers are bracing themselves for more pain in prices soon to be announced by processors — businesses that many farmers also own stakes in as shareholders.
“Some new entrants will struggle. They’re probably overcommitted and not quite prepared for this,” Mr Bryen said.
“They’ll need to work on their model to sustain their productivity and work for the future.”
As chairman of the Macadamia Industry Varietals Improvement Committee, he joined other growers visiting the Maroochy Research Centre on Queensland’s Sunshine Coast.
“We want to end up with more profitable cultivars, that’s the bottom line,” said lead macadamia researcher Professor Bruce Topp from the Queensland Alliance for Food and Agriculture.
Great strides already made
Selective breeding has focused on reducing the time it takes for trees to produce nuts, growing nuts with larger kernels and thinner easier-to-crack shells, and smaller hardier trees that require less pruning.
It is a painstaking process to cultivate trees, cull unsuccessful ones, and repeat field trials on different farms with different soils and climatic conditions.
“Thirty years ago, orchards started to produce nuts in year five and six, and now we’ve got orchards that can produce nuts in year two and three and have commercial yields by year four or five,” Mr Bryen said.
Of the estimated 38,000 hectares of macadamias planted in Australia, 26,600 hectares have matured enough to bear nuts.
Australia and South Africa grow 50 per cent of the global crop, followed by China, Kenya, the US state of Hawaii, Guatemala, Vietnam and Malawi.
Tens of millions of dollars have been invested in expanding orchards and supply.
“I think the important thing to remember is that fundamentally it’s a great product that we need to generate demand for,” Australian Macadamia Society chief executive Clare Hamilton-Bates said.
“There are so many people in our domestic market and internationally that have yet to experience macadamias – so huge opportunity.
“Yes, difficult times [now], but the horizon and the future is so good.”
Concern over prices being paid to growers has not resulted in a rush to sell farms.
Bundaberg-based Elders Rural real estate agent, Baden Lowry remembers the panic when prices last nose-dived.
“I can recall the nut-in-shell prices back in 2007–08 as low as $2-$2.30 a kilogram,” Mr Lowry said.
“A lot of younger farms came onto the market, but within a 12-month period the price did increase significantly and resulted in a lot of those farms then being taken off the market.”
His Elders colleague, Garry Martin, has sold farms between northern New South Wales and Gympie for 48 years.
While he said there was no sense of doom and gloom from growers, interest from buyers has slowed.
“It’s probably been a good six or seven months since I’ve had a phone call from anyone wanting to buy a macadamia farm, bearing in mind that there have not been many on the market,” Mr Martin said.
“A year or two ago, when commodity prices were at a peak of $5-6 a kilogram, every second day we’d be getting a phone call from somebody inquiring as to whether we had any macadamia farms for sale.”
Currently, 80 per cent of Australian-grown macadamias are exported.
Their oil is used for cosmetics and cooking, and the kernels are popular for snacks and as ingredients in confectionary products and health foods.
As of November last year the industry had an annual farmgate value of $201 million and a retail value of more than $994 million.