Macadamia growers can rule out another year of record prices with a strong Australian dollar expected to deliver lower returns across the industry this season.
- The macadamia price has dropped by more than $1 after a year of record prices
- The peak industry body says there is still room for growers to make good profits
- A NSW grower says the new price is sustainable
After finishing up paying $6.20 last year, the country’s largest macadamia processor has announced a notional price of $5.10 per kilogram nut-in-shell for 2021.
Marquis Macadamias chief executive Larry McHugh said the price drop for suppliers to largely due to the exchange rate.
“Last year we were operating in the 60s for the exchange rate and this year we’re in the high 70s,” he said.
Mr McHugh said that some of the market had been affected by the COVID-19 pandemic.
“In general, the retail market for whole kernel and big half kernels is very good,” he said.
“But for small styles that are used in ingredients for cookies, in bakery and in restaurant trade, the shutdowns around the world of restaurants and cafes have really affected that ingredient market and the prices on that product have fallen away quite substantially across the last year.”
In 2018 that Marquis saw the price go as low as $5.20.
“At the time it was considered to be a very good price,” Mr McHugh said.
“Although it is a fall from the peaks of the in the $6 last year, it’s still a reasonable price as far as being a viable price for growers.”
He said in the past the price had fallen “quite violently”.
“So I think that in general, when we think about what’s happened to some other businesses around the world, that we’ve been relatively well-off during the COVID crisis.”
The Australian Macadamia Society chief executive Jolyon Burnett said that $5.10 was still a good price that allowed growers room to make a profit.
“I don’t think people should be surprised by this, [especially] for anyone who was in the industry back in 2008, when the price was a little over $1.20 a kilo,” he said.
“We do have quite a number of growers who have not seen the price go down in their time in the industry and so I think this will come as a bit of a shock to some of those.”
Mr Burnett said that growers who had been following AMS information would not be surprised by the price correction.
“Most corrections are a response to changing market situations and that’s a good thing — the better aligned-price and supply is with the market and demand, the more stable the industry is,” he said.
Mr Burnett said he hoped this year’s price would not deter newcomers to the industry.
“We are still a small fraction of the global trade in tree nuts — around two per cent,” he said.
“We remain aligned to consumer trends like gluten-free, like plant-based diets, like veganism, vegetarianism, paleo, so all of these fundamentals are still pointing to a sound future for the industry.”
The Australian Macadamia Society has released its initial forecast of a 50,770-tonne crop (at 3.5 per cent moisture) for 2021, an increase on the 46,900 tonnes delivered last year.
Grower has seen worse
Cath Ford, whose family orchard at Rosebank, north of Lismore, supplies nut to Marquis Macadamias, says this year’s price is sustainable and allows for growers to return a profit.
“It was incredibly high last year, which was wonderful for us,” she said.
“But we also know that to maintain and sustain a market you’ve got to get a happy level between the grower, the processor, the consumer, so I think the price at the moment is quite good.
Ms Ford remembered being paid $1.80 a kilogram for her nuts.
“There was no profits but you had to keep going,” she said.
Ms Ford joked that making a good profit this year was up to her husband.
“It depends really on my husband’s desire for mechanical equipment in the shed and how much money we can retain from that,” she said.
“But yes, I think that we’ll be fine.”