Macadamia Nuts in Hawaii: History and Production - ctahr ...

director of HAES at the College of Tropical
Agriculture and chairman of the former Macadamia
Nut Task Force. His untiring efforts and
leadership kept the University of Hawaii macadamia
nut research in proper priority perspective,
and assured adequate funding from the University
and the Hawaii Macadamia Producers Association.
He kept the industry moving in the righ t
direction and on an even keel through the years.
The HMPA was represented on the Task Force by
Hiroshi Ooka, formerly with Royal Hawaiian
Macadamia Company. This unit became the
Industry Analysis Group in later years.
Last, but by no means least, the Governor's
Agricultural Coordinating Committee, started in
Governor John A. Burns' administration with
Toshio Serizawa as administrative head, was
formed in 1971 to coordinate and monitor all state
government involvement in agricultural doings
and to report accomplishments to the governor.
After a cumbersome start and a period of
inactivation, the committee, with properfunding,
was reactivated with Richard Matsuura as
administrator. Currently, the committee is under
the leadership of Tadashi Tojo and Yoshiko Hall,
and it is making a tremendous effort in
encouraging, developing, and keeping agriculture
as a dominant force in Hawaii's economy.
PROFITABILITY OF PRODUCTION
Cost
The production and consumption of macadamia
nuts have become increasingly popular and
attractive in the last 20 years. Nut production has
increased at C. Brewer and Company Orchards at
Keaau and Ka'u and at Hawaiian Holiday. Hawaiian
Host Candies has made strong efforts in
promotion and sales as the many small growers
have increased their acreage and production.
Al though there is now (1981-82) an oversupply of
nuts, the nuts have been in short supply historically.
The current oversupply is a function of the
recession and a supply and demand matter, which
should be corrected in time.
On the retail market on the island of Hawaii,
when macadamia nuts are sold for about $0.34
an ounce, peanuts are sold for $0.12, almonds for
$0.23, and walnuts for $0.15. Although this price
differential will obviously vary a t different times
and places, the relative values are valid. Macadamia
nuts still command a premium price whenever
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they are available. But the fact that nuts are purchased
on the retail market, even in Hawaii, predominantly
as gift items by Hawaiians and tourists
alike indicates that the nuts may be priced too
high and, at the same time, may be working their
way out of the market. The authors feel this speculation
is real, and a matter that must be given
serious thought; probably a redirection of efforts
is in order.
Investment capital is another matter to consider.
In First World areas, capital for production expansion
is difficult to obtain, since investors demand a
rapid cash return in any enterprise. Macadamia
nut production is not a lucrative business in terms
of cash flow, since the cost in its early years, or
front-end expense, is high, and a positive cash
flow does not develop until the seventh to the 10th
year, depending on tree care and growth conditions.
In the Third World countries where relatively
cheap labor and land are still available, the
planting and production of macadamia nuts may
develop when those governments are supplied
with capital from First World countries.
The economics of macadamia nut production is
influenced by the varying perspectives or desired
production magnitudes of different individuals. A
profitable enterprise is possible with one tree, 10
trees, 10 acres, or 1000 acres. The business depends
on the effort, time, and money an investor might
wish to spend or earn-the net return is basically
proportional to the size of the opera tion.
To illustrate, let us use 100 pounds of in-shell
nuts per tree at maturity, at a wholesale price of
$0.30 per pound.
100 pounds @ $0.30
Cost: harvesting
husking
handling
fertilizer
weed control
miscellaneous
$ 7.00
5.00
4.00
6.00
1.00
1.00
$24.00
$30.00
24.00
Net profit: $ 6.00
However, in a one-tree operation at $0.30 per
pound, the owner will probably do all of the work,
so his total net income may be as high as $20.
This analysis may be an oversimplification of
the total problem, but addition, subtraction, or
multiplication of cost items considered in this
illustration can give anyone an indication of gross