DROUGHTS in competing export nations and a favourable exchange rate have helped Australian tree nut industries surge from strength to strength in the past decade.
So says yesterday's Australian Bureau of Agricultural and Resource Economics and Sciences' (ABARES) Outlook 2018 agricultural commodities report, along with some cautionary projections.
The real gross value of Australian tree nut production is projected to increase from just over $1.0 billion in 2017–18 to $1.5 billion in 2022–23, according to ABARES.
Almonds and macadamia nuts account for most of this growth, followed by walnuts and hazelnuts.
Free trade agreements were also cited as springboards for increased exports for the nut categories.
In 2016–17 Australian almonds were exported to more than 30 countries and macadamias to more than 20 countries.
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"Area expansion over the five years to 2022–23 is estimated to average 3 per cent annually for almonds and 4pc for macadamias," the report says.
"Almond production (shelled) is projected to reach 115,000 tonnes by 2022–23 and macadamia production (in-shell) to reach 60,000 tonnes."
"Walnut production (in-shell) is projected to increase from 6500 tonnes in 2015–16 to 17,000 tonnes in 2022–23. Hazelnut production (shelled) is projected to increase from 170 tonnes in 2015–16 to 2800 tonnes in 2022–23."
Australia’s largest competitors in the global nut trade are the United States for almonds and South Africa for macadamia nuts.
Three-year droughts in the US and South Africa up to 2017 provided an avenue for profitable Australian production and orchard expansions.
But ABARES' strong forecast is tempered with some reality.
"A challenge for Australia’s tree nut industries is maintaining international competitiveness," the report says.
"The prices of these nuts (in real terms) are expected to fall over the medium term as production increases in China, South Africa, Turkey and the United States outpace growth in demand.
"The International Nut and Dried Fruit Council estimates that global production of nuts increased significantly over the last 10 years."
In Australia, annual production of almonds increased by 6.3pc; hazelnuts by 2.1pc; macadamias by 5.9pc and walnuts by 7.9pc.
Australia's tree nut expansion might be impressive but other nations have also forged ahead.
The non-bearing areas planted to almond trees in California increased from 68,799 hectares (170,000 acres) in 2014 to 121,410ha (300,000ac) in 2016.
New macadamia tree plantings in South Africa are expected to increase by 10pc per year over the next 10 years.
"This increase in global production capacity poses a significant future price risk for Australian nut exporters," the report says.
"Increased global supply is expected to result in falling real prices for Australian tree nuts, and the cost of irrigation water is expected to raise production costs.
"This makes ongoing productivity improvements essential through investment in research and development, supply-chain efficiencies and value-adding opportunities in global value chains."
Macs on track
IT'S full steam ahead for the industry according to the Australian Macadamia Society (AMS).
Last month the AMS released its 2018 crop is forecast of 47,600 tonnes in-shell at 10pc moisture (44,500 tonnes at 3.5pc moisture).
The 2018 crop is expected to be marginally higher than the 2017 crop (46,000 tonnes in-shell at 10pc) which was affected by Cyclone Debbie and other severe weather events.
AMS chief executive officer, Jolyon Burnett, says the Australian macadamia industry continues to expand, with further large plantings in both new and existing growing regions (including the Clarence Valley, South Ballina and Mackay) over the past 12 months.
“We have seen sustained investment in new orchards over the last few years, with many of these trees set to come into production as early as 2020,” Mr Burnett said.
“The Australian industry will continue to be a consistent reliable supplier into the future due to this investment and plans for further orchard expansion in many regions."