Nut grower's revenue drops 14%

ML Macadamia loses money despite getting a price adjustment

ML Macadamia Orchards LP, the state's largest macadamia nut grower, said yesterday it lost $27,000 in the second quarter despite receiving $343,000 from a favorable nut price adjustment.

Revenue fell 14.2 percent to $1.3 million from $1.5 million. The company's loss was nearly the same as last year's.

The second quarter, which marks the end of the harvest season, usually is one of the year's lowest harvest periods and accounts for less than 4 percent of a total year's harvest. Still, Dennis Simonis, president and chief executive of ML Macadamia, expected better.

"We expected more pounds and were a little disappointed with the volume," Simonis said. "But it certainly doesn't make or break the year. We see a fairly strong crop in the second half of the year. So we're still feeling comfortable about the crop."

The favorable nut price adjustment from Mauna Loa Macadamia Nut Corp., the exclusive purchaser of ML Macadamia's nuts through this year, was an increase to 57 cents for the 2005 crop from the 55.5 cents that ML Macadamia had booked at year-end.

Simonis said under contracts renegotiated earlier this year that ML Macadamia will receive an average of 73 cents a pound in 2006. That price will be adjusted by the quality of the nuts, he said.

Slightly different weather patterns from the norm affected the timing of the harvest last quarter and resulted in nut revenue jumping 61.2 percent to $735,000 from $456.000. At the same time, the unpredictable weather caused contract farming revenue to drop 47.1 percent to $553,000 from $1 million.

In the second quarter of 2005, ML Macadamia had net income of $26,000. Those earnings were boosted by a crop insurance settlement of $147,000 because of a low harvest.