Ka Wai Ola - Office of Hawaiian Affairs, Volume 7, Number 4, 1 April 1990 — $57.6M is potential in macadamia [ARTICLE]

$57.6M is potential in macadamia

How profitable could macadamia nut production be, on medium-sized farms of 25 to 500acres, under typical growing and marketing conditions? "Economics of Macadamia Nut Production in Hawaii," is a report designed to find out. The researcher-authors are Dr. Frank S. Scott, Jr., John Sisson, Maurice Kanda and Teck Yeap of the Department of Agricultural and Resource Economics, College of Tropical Agriculture and Human Resources (CTAHR), UH Manoa. Based on their study of printouts on retail sales, surveys of consumer demand, and controlled test marketing and published secondary data from several sources, the research team projects a world market potential for approximately 64 million pounds of kernels for the year 2000. This projection assumes the market would be fully developed and producers could get 90 cents a pound in-shell. This represents real eeonomie potential for Hawai'i. Macadamia nuts are the leading crop in the state and have risen from 21 million pounds

(valued at $11.3 million) in 1978 to 45 million pounds (valued at $35 million) only 10 years later. At that time, there were 650 farms with 21,500 acres in macadamias, 15,600 acres being in full or partial production. Because supply and demand for macadamia nuts is dynamic rather than static, and increasing competition exists from other sources, it is crucial for farmers to be able to determine how profitable their farms' macadamia nut production is or could be. To meet that need, the report (CTAHR Research Series 059) provides a guide to potentia! producers in reaching their investment decisions. Their research has enabled these agricultural economists to project estimates based on various macadamia nut yields, prices, and land costs. A budget analysis data bank has been produced. It is designed to be readily updated as input-output prices change. The analyses in the report's appendices are set up so that individual farmers ean plug in their own data and get an indication of how their macadamia nut business is doing.