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No More Macadamia Nuts
26 August 2007

Macnuts

2005 In addition to coffee we also have about five acres of macadamia nut trees.  There was a time when Hawaiian macadamia nuts sold for more money than Kona coffee but things have changed and that time may be gone forever.  Competition from overseas is a primary reason but there are also major issues with labor, marketing and corporate politics.  So it's looking like the Hawaii macadamia nut industry will soon go the way of the Hawaii sugar cane industry and may never recover.

A couple years ago prices were down but we still managed to sell our macadamia nuts to one of the mills.  Last year that mill stopped accepting mac nuts from farmers and none of the other mills were accepting new accounts.  This year the prices are even lower and even fewer mills are accepting nuts.  The time required to maintain and pick our macadamia nut orchard just isn't justified so we have all but abandoned our trees.

Fecon Several other farmers in the area have already taken out their macadamia nut trees and replaced them with coffee.  They usually use bulldozers or giant Fecon machines.  Neither method is cheap and removing the trees is just the beginning, preparing the ground and planting coffee is another giant expense.  Once planted, coffee takes at least three years before it starts to produce anything to pay back all those expenses.  If the macadamia nut market recovers and we wanted to replant with macadamia trees, it takes over twelve years before they start producing.  With all the time and expense involved, I want to make sure I don't make any hasty decisions.

We planted another field with coffee this year.  All that's left now are a few empty spots here and there around the farm.  We'll probably plant those next spring, leaving the macadamia nut orchard for yet another year.  If we're lucky and Hawaii's macadamia nut industry recovers then we'll be in good shape but that's not looking very likely.

Crop Another farmer and I have been discussing the possibility of purchasing our own macadamia nut processing equipment.  We both process our own coffee so we can leverage off our existing equipment.  It would cost a few thousand dollars to get started.  The idea is to process the macadamia nuts for all those farmers rejected by the large mills.  We would process the nuts but not buy them, finding a market for the processed nuts would be up to the individual farmers.  It sounds like a decent plan but it's not a sure thing.  I can barely keep up with our coffee so dealing with macadamia nuts at the same time might be overwhelming.  I'm also not convinced that the costs will stop at a few thousand dollars.  And there's certainly no guarantee that there will continue to be a demand for macadamia processing.  The big mills aren't stupid, if they're getting out of the industry then it may not be a good idea for a couple of little guys to jump into the industry.  There's just no way to know for sure.

Coffee Things change, those that can adapt will survive, those that can't will perish.  It's called survival of the fittest.  If another country or another farmer has figured out how to sell macadamia nuts better or cheaper than I can, then they will get the business.  From another perspective, it makes sense to buy macadamia nuts from whomever offers the best product at the lowest prices.  So I don't hold a grudge against anyone just because the world happened to change in a way that doesn't favor me.  Instead I will do my best to adapt and find something I can do better.

We have sold our last bag of macadamia nuts for now.  If the market recovers we may sell macadamia nuts again.  In the mean time we will concentrate on our coffee.  Our coffee sales continue to grow.  This year's coffee harvest is looking promising and there are still plenty of people that crave their daily fix of Kona coffee.

While trying to sell this year's avocado crop I asked one of the local produce wholesalers what crop he has the highest demand for.  Without hesitation he said limes.  Apparently the resorts on the island can't get enough limes.  I don't know how well lime trees will do on our farm but we do have a lemon tree and it produces more lemons than you can shake a stick at.  Maybe I'll plant some lime trees and see how they do.




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