The Australian Tree Nut Industry

Written by: Duncan B. on 25 November 2021

The tree nut industry in Australia is big business. This year the farm gate value of the production of almonds, macadamias, pistachios, walnuts, hazelnuts, pecans and chestnuts was almost $1.2 billion. This is forecast to rise to over $2 billion by 2030. $500 million of new investment has been poured into new nut plantings every year for the past five years.

Almonds are Australia’s most valuable horticultural export crop. In 2021, almond exports were worth $545 million. The two biggest growers of almonds in Australia are Singapore-based Olam and Australian-owned Select Harvests. Almond plantings in the lower Murray irrigation area total about 34,000 hectares, up by 7000 ha since 2018.

Macadamias are the second most important nut crop after almonds in Australia. Production currently worth $350 million is tipped to double by 2030. The big players are getting involved in macadamias as well. Australian-owned Rural Funds Management plans to invest $500 million over the next decade in macadamia plantings. Belgian Finasucre has bought 1000 ha of macadamia plantations for $59 million, and the Canadian Public Sector Pension Fund, PSP, is there of course. They own a macadamia cracking plant in Queensland, and are expanding their plantings of macadamias. 

A firm called Stahmann Webster, recently purchased by the Canadian Public Sector Pension Fund, dominates the production of walnuts and pecans in Australia, producing more than 85% of the national crop. 

It is not surprising that the big boys are into growing tree nuts. Gross revenue per hectare from tree nut crops ranges from $20,000 to $30,000.  The rate of return of $2000 to $3000 for every megalitre of water applied to nut trees is 10 to 20 times higher than the return from traditional horticultural crops such as tomatoes and other vegetables. These returns are also well above the returns from dairying on irrigated farms.

Almond trees are thirsty! 12.5 megalitres of water per hectare are required to grow almonds. This compares with 9.9-12.2 for rice, 9-10 for table grapes, 8-10 for citrus, 7 for cotton and 4 for olives. It is estimated that the horticulture industry in the Murray-Darling Basin, (much of it being nut plantations), will require 1.5 million megalitres of water from the river system within five years. Citrus and grape growers are expressing concerns about future water availability.

The high returns from crops like almonds allow the big horticulture companies to manipulate the water market to force the price of irrigation water in the Murray-Darling Basin to levels beyond the means of ordinary horticulturists and dairy farmers. These foreign and Australian-owned agribusiness giants make sure that they have plenty of water while many small irrigation farmers have been forced out of farming due to the high price of water.

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