Macadamia grower's handbook

Reprint – information current in 2004

REPRINT INFORMATION – PLEASE READ!

For updated information please call 13 25 23 or visit the website www.deedi.qld.gov.au

This publication has been reprinted as a digital book without any changes to the content published in 2004. We advise
readers to take particular note of the areas most likely to be out-of-date and so requiring further research:
• Chemical recommendations—check with an agronomist or Infopest www.infopest.qld.gov.au
• Financial information—costs and returns listed in this publication are out of date. Please contact an adviser or
industry body to assist with identifying more current figures.
• Varieties—new varieties are likely to be available and some older varieties may no longer be recommended. Check
with an agronomist, call the Business Information Centre on 13 25 23, visit our website www.deedi.qld.gov.au or
contact the industry body.
• Contacts—many of the contact details may have changed and there could be several new contacts available. The
industry organisation may be able to assist you to find the information or services you require.
• Organisation names—most government agencies referred to in this publication have had name changes. Contact
the Business Information Centre on 13 25 23 or the industry organisation to find out the current name and
contact details for these agencies.
• Additional information—many other sources of information are now available for each crop. Contact an
agronomist, Business Information Centre on 13 25 23 or the industry organisation for other suggested reading.
Even with these limitations we believe this information kit provides important and valuable information for intending
and existing growers.
This publication was last revised in 2004. The information is not current and the accuracy of the information
cannot be guaranteed by the State of Queensland.
This information has been made available to assist users to identify issues involved in macadamia production. This
information is not to be used or relied upon by users for any purpose which may expose the user or any other person to
loss or damage. Users should conduct their own inquiries and rely on their own independent professional advice.
While every care has been taken in preparing this publication, the State of Queensland accepts no responsibility for
decisions or actions taken as a result of any data, information, statement or advice, expressed or implied, contained in
this publication.
 1

1
Before you
STAR T

If you have never grown macadamias before, you will find this section
Chapter

very useful. It is a checklist of the things you need to know before you
start. It will help you make the right decisions about growing
macadamias. The information here is brief and to the point. We
provide more detail on important areas in other sections of the
handbook. Symbols on the left of the page will help you make these
links.

A brief introduction to the macadamia industry

Australia grows around 16,000 hectares of macadamias with about 60% in
New South Wales and 40% in Queensland. The main production areas are the
Lismore and Nambucca regions of New South Wales, and the Glasshouse
Mountains, Gympie, Bundaberg and Atherton Tableland regions in Queens-
land. A small industry also exists in southwest Western Australia. Around
800 growers are involved in the Australian industry, with orchards ranging
in size up to 600 hectares. The average orchard size is about 20 hectares.

The macadamia is the only Australian native plant to be commercially grown

in a major way as a food crop and so is a unique Australian industry. The
industry in Australia only developed to a significant extent after Hawaii
developed a commercial macadamia industry following the tree’s introduc-
tion there as a windbreak for sugarcane plantations. For many years, most of
the Australian industry was based on varieties developed in Hawaii, with the
varieties HAES 246 (Keauhou), HAES 344 (Kau), HAES 741 (Mauka) and
HAES 660 (Keaau) making up most of the orchards. However, in recent years
with the development of Australian varieties such as Hidden Valley A4 and
Hidden Valley A16, most new orchards are now based on a mixture of
Hawaiian and Australian varieties. Trees are grown from grafted or budded
nursery stock.

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Nuts are harvested off the ground using mechanical harvesters, and in some
situations, by hand. Harvesting begins in March-April and is normally
completed by September-October.

About 25% of the crop is exported as nut-in-shell (NIS). Almost all of the rest
of the crop is processed in factories in southern Queensland and northern New
South Wales with about 70% of the processed product being exported. The
major markets are USA, Japan, China and Europe, particularly Germany.
About 1% of production is sold as nut-in-shell on the Australian fresh nut
market.

Know what you are getting into

Macadamia growing is appealing to new growers because the industry is
perceived to have a more secure, assured and profitable future than many
other tree crops. This is underpinned to some extent by the fact that
macadamias are in demand on the world nut market, yet make up only about
2% of world tree nut production. This indicates significant potential scope for
expansion. Other advantages include:
• As the industry continues to mature, production and marketing risks will
be better understood.
• The industry has a strong industry peak body, the Australian Macadamia
Society, including growers, processors, marketers and researchers,
which operates a well-organised R&D and market promotion program.
• Through the efforts of the industry, the Australian product has developed
a good reputation for quality and is well respected in the world market
place.
• Mechanisation is available for most orchard operations. This reduces
labour management concerns, particularly when compared with most
other subtropical tree crops, which require hand harvesting and pruning.
• Compared to other horticultural crops, macadamias, if handled correctly,
have a longer potential storage life.
• Packaging and marketing costs are substantially lower than for other
horticultural crops.

However, be aware that success in macadamias is not as easy as many are led
to believe. The following points summarise the main constraints:
• Like all tree nut crops, macadamias are a long term venture with
production commencing only in about the fourth or fifth year and the trees
not maturing until about 12 to 16 years after planting. Individual tree
yields are also lower than for most other tree crops. This means you have
a long wait for your first cash flow and an even longer wait for a positive
return on your investment.
• Because macadamias are predominantly an export crop, the prices
received by growers can vary significantly from year to year depending
on market developments and Australia’s exchange rate with its trading
partners. This makes it difficult to predict prices and future returns.

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 Before you start 3

• Macadamia trees have limited tolerance to frost, heat, wind, drought, fire
and poor drainage. Therefore, selection of an orchard site has to be
See The Farm you need on exacting with only a limited range of areas in Australia ideally suited to
page 6 for more information on the crop. Finding farm blocks of a viable size within these limited areas
orchard selection issues.
can be difficult. Remember that blocks with steep and broken terrain will
be substantially more expensive to bring into production and subse-
quently manage. Blocks in drier areas will also require irrigation.
• Macadamia trees require a high level of management for profitable yields
and nut quality. They are susceptible to a wide range of pests and
diseases, which require regular monitoring and application of control
measures. Irrigation (where required), nutrition, harvesting and post-
harvest handling also need careful management. This requires the ability
to carefully plan and manage orchard operations. In addition, as prices
are linked closely with nut quality, a commitment to quality and quality
assurance is essential.
• As the impact of farming on the environment comes under increasing
scrutiny, all orchard operations require careful management to minimise
environmental risks. Particular issues include the noise from dehusking
equipment in closely-settled areas, spray drift control, and soil erosion
under trees from the combined effects of high rainfall, shade and
mechanical harvesting.
NOTE
• The establishment of a macadamia orchard requires a major capital
investment. Although it may be argued that this is no greater in the initial
Do a thorough marketing
stages than for most other tree crops, the payback period is longer and
and business plan. This will individual items of harvesting and postharvest equipment are much more
give you a more accurate expensive.
picture of what you are
getting into. It is important before embarking on growing macadamias, to take time to
research the subject thoroughly. Be cautious about extravagant claims of
economic performance and do a thorough business plan.

What you can expect to make

Yields
Yields vary with location, season, variety and level of management. Bearing
commences in about the fourth or fifth year and reaches a peak at maturity
in about the twelfth to fifteenth year. For a well-managed orchard with tree
spacings of 8 m x 4 m (312 trees per ha), expected peak yields at maturity are
approximately 3.5 to 4 tonnes of NIS per ha (12 to 13 kg per tree) at 10% m.c.
Very well-managed orchards may do slightly better than this and conversely,
poorly-managed orchards or those on poor sites may fail to reach these
figures. An indication of yields for a well-managed orchard is shown in
Table 1.

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Table 1. Expected average yields (kg NIS at 10% m.c. based on 312 trees/ha)

Year Yield per tree Yield per hectare*

1 0 0
2 0 0
3 0 0
4 0 0
5 1 300
6 2 600
7 4 1,200
8 6 1,800
9 9 2,400
10 10 3,000
11 11 3,200
12–15 12–13 3,500–4,000
* Figures assume that trees are pruned to maintain machinery access and light and
spray penetration. Note that in closer-spaced orchards, yields may reach the peak/
ha figures earlier than indicated. However, yields may then decline without
pruning and good management. With good management, yields/ha for mature
trees are generally similar for all spacings.

NOTE
Prices
Price is often adjusted
Prices paid by processors vary from year to year depending on world market
upwards for higher sound
forces of supply and demand and Australia’s exchange rate. From 1990 to
kernel recovery and often
2003, prices for NIS with 33% sound kernel recovery, a maximum of 3.5%
adjusted downwards for
unsound kernel recovery, at 10% moisture content, varied from a low of
higher unsound kernel
around $1.60/kg to a high of around $3.20/kg. Approximate annual prices
recovery.
paid by major processors during this period are listed in Table 2.

Table 2. Approximate annual prices for NIS (33% sound kernel recovery, max of 3.5% unsound kernel recovery, at
10% moisture content)

Year 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Price
($/kg) 2.50 1.60 2.03 2.75 2.80 3.00 3.05 2.70 2.35 2.04 2.10 2.45 2.75 3.20

In developing a budget, it is suggested that a long-term average price of $2.20

to $2.60 be used.

Production costs
NOTE Before trees start to bear, it costs approximately $3,000 to $3,500 per hectare
Production costs include per year to operate the orchard. This is based on an orchard of 312 trees per
only those costs actually hectare, equating to a per tree cost of approximately $10 to $12. This includes
associated with growing the costs involved in fertilising, irrigating (if required), mulching, pest, disease
crop. These do not include and weed control, tree training, machinery operating costs and labour. When
fixed or overhead costs harvesting commences, the additional costs of mechanical harvesting,
(which add approximately dehusking, drying and storage are generally about $1,000 to $1,500 per
$1,500/ha for a typical 20 ha hectare (assuming a yield at 12 to 15 years of 3,500 kg NIS per hectare). This
orchard), capital costs or makes the total annual production costs for a mature orchard about $4,000
interest repayments. to $5,000.

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Before you start 5

Gross income
No significant income can be expected until the sixth year. Costs generally
exceed income until about the eighth year. Accumulated costs generally
exceed accumulated income until at least the eleventh year. At a NIS price of
$2.50/kg, marketed yield of 3,500 kg NIS/ha and production costs of $4,500/
ha, income from mature trees before fixed or overhead costs are subtracted,
should be around $4,000 to $4,500/ha. This would make income from a
mature orchard of 20 ha (before fixed or overhead cost are subtracted) about
$80,000 to $90,000. However, remember that there can be considerable
variation from these figures. Also note that taxation implications will affect
the breakeven point.

The capital you need

Excluding the cost of land and a house, up to $400,000 (irrigated) and
$300,000 (non-irrigated) is required to establish a 20-hectare macadamia
orchard (approximately $50 to $60 per tree). This includes the cost of:
• trees, land preparation and tree establishment;
• a shed for storage, postharvest handling and drying;
• an irrigation system including a dam, piping and under-tree sprinklers
(where required);
• a tractor (about 90 HP);
• a slasher;
• a trailer;
• a boom sprayer for herbicides;
• a 4WD utility.

Once cropping commences in the fifth year, approximately a further $120,000

NOTE is required for a harvester, dehusker, sorting, drying and storage equipment,
The approximate figure of and an airblast sprayer for insecticides and fungicides. An alternative to
$120,000 is a guide only. purchasing this equipment would be to use contract harvesting services
It varies according to the (where available), a central harvesting and dehusking facility or a processor
equipment purchased. accepting nut-in-husk (where available). If using contract services, ensure
that the service will be available at critical times.

Taxation
As the costs of establishing an orchard are substantial, the ability to deduct
See Taxation on page 74 for a allowable expenditure through taxation is important to most growers. The
brief summary of taxation
issue is complex and professional advice from an experienced horticultural
provisions.
accountant is recommended.

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6 Chapter 1

WARNING
The farm you need
If in doubt about the
quality of the soil, seek
Soil
advice from an experi-
Macadamias grow on a wide range of free-draining soils but perform best on
enced soils consultant.
deep, well-drained soils, rich in organic matter. For successful commercial
production, a minimum depth of 0.5 m of friable, well-drained soil is
essential. A depth of 1 m is preferred, as this minimises the risk from trunk
canker disease and tree decline. However, be aware that extremely well-
NOTE drained soils may be a problem in drought years, if not irrigated. Avoid soils
It may be possible to with heavy clay or rock bars within 1 m of the surface. Make a soil map to
mound the tree rows to check variation in soil type and depth across the site. Also avoid soils
improve soil depth or containing small stones of a similar size to macadamia nuts near the surface.
drainage. These may cause excessive wear on harvesting and dehusking machinery.

Slope
Slopes of up to 15% are suitable provided the orchard is designed to minimise
erosion. Steeper slopes present a major erosion risk and make it difficult to
operate machinery safely, particularly when wet. Avoid these wherever
possible.

Wind protection
Protection from strong winds is desirable, either through natural forest
surrounds or planted windbreaks. Macadamia trees are brittle and breakages
occur easily, particularly during storms in highly exposed sites. Wind can
also slow growth in young trees and may cause premature fall of young,
immature nuts. Windbreaks can also double as buffer zones to reduce the risk
of spray drift. However, competition for light, water and nutrients, future
orchard management problems and the reduction in planted area need to be
carefully considered. Windbreaks may also be relatively ineffective in some
sloping sites.
NOTE
Except in highly The most susceptible period for damage is during the first four years after tree
exposed sites, most establishment. Once trees within the row start to grow together and form a
new orchards are being continuous canopy, they are less prone to significant damage, and wind-
established without breaks are generally of little benefit except in highly exposed sites. In
windbreaks as the addition, if windbreaks are to be effective, they need to be in place at least one
owners consider the year and preferably two years before the orchard is planted. They also need
disadvantages out- to be positioned to provide adequate protection from the direction of the main
weigh the advantages. prevailing winds.

Assess each site on the basis of the above information before planting
windbreaks. Choose species carefully so they will have minimal impact on
later macadamia tree growth and orchard operations such as harvesting.

Climate
Leaves of mature macadamia trees have been known to withstand tempera-
tures as low as –5°C for short periods without damage. Low frost risk areas

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Before you start 7

are preferred for all macadamia orchards because young trees as well as the
lower trunks and flowers of older trees are very susceptible to damage when
temperatures fall below –1ºC. The trunks of young trees can be protected
from frost damage by wrapping the lower trunks with insulating materials.

Avoid sites where temperatures regularly exceed 35°C. High temperatures

reduce vegetative growth, increase premature nut drop, adversely affect nut
growth and oil accumulation, and may cause leaf burn. Also avoid sites where
winter maximum temperatures are regularly less than 15ºC. Consult local
climatic data, especially outside known major production areas.

Where possible, avoid locations prone to extended wet weather in August and
September. This favours flower diseases such as blossom blight and makes
pesticide application and harvesting more difficult.

NOTE Location
Check with your local Because of the noise associated with dehusking equipment, and possible
authority on noise complaints about spraying operations, the number and proximity of neigh-
regulations. bours’ houses needs to be considered. When purchasing land, also consider
the likelihood of future urban development which might impact on farming
operations.

Water supply
Irrigation is recommended where annual rainfall is less than about 1200 mm
or where it is unevenly distributed throughout the year. In other areas,
irrigation may be useful, particularly during extended dry periods. Where it
is used, calculate requirements on mature trees using up to five megalitres per
hectare per year. A salt level of less than 1.2 dS/m (decisiemens per metre) is
preferred. Note that all orchards require a water supply for spraying.

Fire risk
As macadamias are highly susceptible to fire damage, take the fire risk of
surrounding bushland into account when purchasing land. This can be
minimised by preventing the buildup of long grass in dry years.

The machinery and equipment you need

Essential equipment to set up the orchard includes:
• an irrigation system including a dam, piping and under-tree sprinklers or
trickle system (where annual rainfall is less than 1200 mm or where it is
unevenly distributed throughout the year);
• a tractor large enough to operate spray and harvesting equipment (for
example 90HP for a 20-hectare orchard);
• two sprayers—one for weed control (boom sprayer preferred for larger
orchards); one for pests and diseases (for example, a handgun);
• safety equipment to use when spraying;
• storage shed for farm chemicals;

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8 Chapter 1

• slasher;
• 4WD utility;
• heavy duty trailer (preferrably tipping);
• fertiliser spreader;
• workshop space and tools.

When nut production commences in the fifth year, the following equipment
is also required, unless use is made of contracting services or central nut
handling facilitites:
• harvesting equipment;
• dehusker and sorting equipment;
• shed for storage, postharvest handling and drying;
• a silo or similar for drying and storing nuts;
• a tree sprayer (for example, airblast sprayer) for pest and disease control.

The labour you need

One person should be able to manage up to 30 hectares (non-irrigated) and
20 hectares (irrigated) of orchard trees for the first four or five years until
trees begin to bear. This includes fertilising, irrigation, tree training, weed
control, pest and disease control and slashing.

From then until about the eighth year, some casual labour may be required
for harvesting, dehusking and sorting.

From the eighth year on, labour needs at harvesting increase dramatically
making either the purchase of harvesting machinery or the use of contract
harvesting services necessary. Note that smaller orchards are generally more
labour intensive due to a reduced range of machinery.

Other considerations
Macadamias are susceptible to a range of pests and diseases and failure to
apply appropriate control measures can lead to major losses of yield and
quality. Spraying is therefore considered essential, particularly between
October and March. Pest and disease monitoring is the best way to determine
the regularity and timing of spraying. This requires willingness to either
employ specialised crop protection consultants or learn these monitoring
systems yourself.

Knowledge of marketing will assist in the negotiation of sales with processors.

A commitment to quality management throughout your entire production and
marketing system is essential if you wish to maximise returns.

The orchard must be run as a business with accurate record keeping and good
financial management.

GROWING GUIDE: Macadamia grower’s handbook