Queensland macadamia growers could abandon harvest, industry after a 40pc drop in value

Reduced global demand due to COVID lockdowns and a rapidly increasing supply from countries like China means the prized crop's value is estimated to have dropped from $183 million in 2021-22 to $110 million in the financial year just gone, according to QDAF data.

Unlike fresh produce, their long shelf-life has led to a stockpile that will take time to move through the supply chain.

The situation, described by industry figures as "unprecedented" and "urgent", isn't likely to improve, with 2023-24 values forecast at $114 million.

For growers, it means they're receiving the lowest farm gate prices in 15 years - well below the cost of production.

Prices have gone from record highs of $6.60 a kilogram nut-in-shell in 2020 to $1.70 this year - a price not seen since 2008.

Marco Bobbert, who owns macadamia and avocado farm Wodonga Park at Mount Binga, 20km south west of Blackbutt, said the current prices weren't sustainable.

"For some growers, and in particular many Northern Rivers growers, it has been a horrendous time and the crushing prices follow multiple natural disasters for some," Mr Bobbert said.

"Given that some producers have opted not to even harvest suggests the cost of production is not being met for producers."

Mr Bobbert believes the time before growers reach breaking point is "not terribly long" and some may look to exit the industry altogether and grow a different crop.

"Those with farms on land that's in demand for other uses - either agriculturally or for development - may find that a very tantalising proposition," he said.

"Exiting a tree crop comes with its own costs and challenges - it's much more difficult to chop and change with tree crops than annual ones."

Christine Rijks of Serendip Plantations at Alstonville, NSW, 15km west of Ballina, says growers exited the industry when prices were low several years ago, but is hoping the current situation is short-term.

"I am hoping that demand and pricing is just a glitch. We have very good infrastructure with quality and experienced processing factories to support this industry in Australia," she said.

Taking a softer tone, Australian Macadamia Society CEO Clare Hamilton-Bate said the industry had been experiencing "unprecedented" market conditions.

"Australian macadamia growers and the entire industry are facing a very difficult year, with the softest farm gates prices in more than a decade," Ms Hamilton-Bate said.

One of the world's largest growers and processors, with operations in Qld and NSW, Marquis Macadamias has also recently acknowledged the situation.

"We recognise the situation's urgency and are working tirelessly to overcome these challenges as quickly as possible," CEO Ben Adams stated in their latest newsletter.

"Resolving these issues will take time, and we are committed to finding sustainable solutions."

While South Africa and Australia are still producing most of the global crop, which sat at 300,000t last year, other countries like China and Kenya are growing their industries.

Industry sources suggest China's macadamia nut production will increase by 5-10pc each year in the next 10 years or so, and the country will soon become the world largest producer of macadamia nuts, the USDA Foreign Agriculture Service says.

Mr Bobbert, who oversees 7000 trees and sells his product exclusively to a Sydney company, said the rapid expansion of orchards overseas was only a concern if demand didn't grow.

"It is [a concern] if the market doesn't grow with production. Should China or India develop a domestic market and create demand, then it won't be," he said.

To make matters worse, the 2023 national crop forecast has just been revised down by 11pc, from 60,000 tonnes in-shell to 53,160t in-shell, AMS says.

Several factors contributed to the revision, including variable seasonal conditions and weather events as well as cost rationalisation and prudent economic decision-making by growers.

"Overall the crop quality is very good and reject levels are down, however nut size is smaller and there has been a decrease in total kernel recovery," Ms Hamilton-Bate said.

"Kernel supply will also be impacted because an increased amount of crop is being sold to the nut-in-shell market."

Despite the gloomy outlook, there is still hope for Queensland growers and processors.

Mr Bobbert said the quality of the Australian crop was very well regarded, giving it the upper hand in plenty of markets.

Wodonga Park manager Corie Goetze is also remaining positive.

"There are plenty of challenges in our industry and others, but I think the quality and marketability will see us through," Ms Goetze said.

And with a softer price comes the opportunity to increase macadamia consumption both across the market and on a per person basis.

"Increasing Aussie consumption and even helping newly producing countries increase theirs will be crucial. Closer trade ties with India, for example, also offer hope," Mr Bobbert said.

"We've seen low prices before and while no two situations play out the same, the quality, taste, and established markets do bode well for the industry, challenges and all."

The macadamia industry had two big wins recently when the Australia-India Economic Cooperation and Trade Agreement entered into force last year and the Australia-United Kingdom Free Trade Agreement (A-UKFTA) came into effect last month.

The India deal will see the tariff on Australian macadamias eliminated by 2028, while the UK deal immediately removes all tariffs on wine, nuts, rice, honey and olive oil.

Marquis wasted no time, hosting one of the largest Indian food distributors around Bundaberg in April.

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