AP PHOTO / HAMAKUA MAC NUT CO.
Macadamia nuts are shown at a nut orchard in Hamakua owned by Hamakua Mac Nut Co. near Kailua-Kona.
Mac nut glut leaves isle farms in rut
Independent growers worry they could be stuck with inventory
KAILUA-KONA, Hawaii » Another bumper macadamia nut crop is expected this year, but Big Isle farmers' biggest problem might be finding someone to buy Hawaii's signature nuts.
With only a handful of processors on the island and one of the biggest temporarily out of the market for fresh mac nuts, hundreds of independent farmers are concerned. They produced a healthy 56 million pounds last year, and many appear to be on track for a good crop this year, too.
Fortunately, the industry is stable, and several other processors could step in to snap up the nuts.
The concern started with a June 7 letter to mac nut growers from MacFarms of Hawaii, one of the largest growers and processors on the island.
In the letter, MacFarms President Hilary Brown and Vice President Mark Crawford announced: "We have concluded that until further notice, MacFarms will not be offering to purchase macadamia nut-in-shell from independent farmers."
MacFarms, which expects a bumper crop from its own nut orchard, cited last season's large crop and costs associated with handling it.
"We have quite an inventory of nuts right now," Brown said. "Also, prices have dropped this year, demand has slowed and we are expecting a large crop this year. That said, if the situation changes, we might be back in the market."
MacFarms of Hawaii, owned by Tennessee-based Sparco Management LLP and California-based Greater Pacific Food Holdings, grows nuts on nearly 4,000 acres of orchards in South Kona and employs 200 people.
In addition, the company has agreed to buy at least 5 million pounds of nuts next year from Hilo's ML Macadamia Orchards LP. But Brown said that deal was not the major factor in the decision.
ML President Dennis Simonis said Macadamia Orchards is considered the world's largest individual mac nut farm, with more than 4,000 acres of trees. Despite the ML name, the company is not affiliated with Mauna Loa Macadamia Nut Corp., which is owned by mainland conglomerate Hershey's.
Judy Magin, executive director of the Hawaii Macadamia Nut Association, said she has been seeking other processors to help the association's 100 members.
"It did surprise everyone but people shouldn't panic," she said of the MacFarms announcement. "There are options. Some of the other big processors are telling us, 'We need Hawaiian nuts.'"
Richard Schmitzler, president and owner of Hamakua Mac Nut Co. and an association board member, said his company still is buying mac nuts and will continue to support independent farmers.
"We are going to do everything we can to help these farmers," he said.
Hamakua Mac Nut Co. does the processing for private labels that are marketed on the mainland and in Guam, Taiwan and Japan.
"We're continuing to build our value markets," he said, also noting plans to open a visitors center for the company.
Although Australia is the world's largest mac nut-producing country, Hawaii-grown nuts generally are regarded most highly.
"Hawaii nuts are the best. They taste the best and have the best oil content," Simonis said.
Some processors, however, are tempted to include lower-grade, non-Hawaiian nuts in their products.
"Unfortunately, some processors will buy foreign nuts and market them as Hawaii products," Simonis said. "Hawaii marketers should be supporting Hawaii farmers."
Schmitzler, Simonis and Brown insist they offer only Hawaii nuts.
Magin said part of the association's mission is to promote Hawaii nuts and protect against misinformation and untruthful labeling.