Macadamia farming in Ecuador – really?

China, India, Egypt, Jordan, Dubai… I can say one thing after living or visiting those places… what a barren wasteland!  At least the parts I saw.  

But Ecuador is different.  

Truly gifted.  

The green here in the Andes is a special color green, really.  So much water.  The dark black top soil runs so deep.  

All you have to do is find the right altitude and it will have a steady year round climate to grow whatever you like.  

So it shouldn’t surprise that a few innovative farmers have done just that, now profiting from Macadamia.  

Precisely, 3 with significant plantations in Ecuador.  And this week I was hanging out with one of the big three on his lot near the town of Los Bancos in Ecuador in the coastal lowlands  but still a ways from the ocean.  

He began… 

You need to find a place that has plenty of water, yet a lengthy dry season for the harvest time, which in this area is from March to July.  

Preferibly between 300-500 meters above sea level.  The Macadamia trees like 25-30 degrees C.

The Mac farmer continued, “you need at least 3000 trees to have a legit, profitable operation.”  

The trees are planted 9 meters apart so you can get about 150 trees on one hectare.  So 20 hectares is all you need to get in 3000 trees.  

Initial investment

Land in this area of Ecuador is alreayd a bit pricey compaatively to other farm areas of Ecuador because it is already great for Cacao (Chocolate bean) and Palm oil and the locals know it.  The going rate for good, yet vacant, farm land around here is $5,000 per hectare.  So for a minimum of 20 hectares that’s $100k.  

You’ll also need about $50k to prepare raw land ready for planting and to build yourself a small plantation home.  

Then comes the trees.  You can buy the seedlings from someone in Ecuador already growing Macadamia for $8 per tree.  For 3000 that would be $24,000.  

You’ll also need a tractor for Macadamia farming.  He says you can find a used one in good condition in Ecuador for around $15k.  

Production and profits
 
On the high end you can expect 18 kilos of brute, whole nut with shell and all per year per tree… and 15% of that is the inner nut ready for consumption.  Thats about 3 kilos from a top producing tree.  On the low end a tree in this part of Ecuador produces 12 kilos of brute nut shell which provides about 2 kilos of nut ready to eat per year.  

The local wholesale price for Macadamia in Ecuador now is $22 per kilo.  

So thats a per tree annual revenue of $66 (on the high end) which for 3000 trees equates to $198,000 per year.  On the low end that figure would be $132,000.  

Variable costs

The farmer I spoke with says he has 5 full time employees for his 50 hectare plantation.  Each worker makes around $400 a month.  

No electricity is needed on the farm and there is no irrigation system, the trees are fine with the natural rainfall.  He himself drives from Quito every weekend to manage the farm himself.  On the way back to Quito he fills the back of his pick up truck with the weeks output of Mac Nuts.  (He has a processing plant and oven in Quito he says cost him around $200k.)  But he said the plant is not necessary, most growers just sell wholesale, he said he’d buy your nuts at the wholesale price if you produced them.  

Also, during harvest time the farmer hires seasonal workers by the day (around $15 per day is the going rate in Ecuador) and for occasional weed cleanings and things too.  

Benefits of Macadamia

The biggest benefit to growing Macadamia in Ecuador is that it is an uncommon product that most locals don’t even recognize, thus, repelling the common thieves.  Plus, the product can not be consumed until processed by expensive machinery which few have, further repelling the thieves that often snatch the Cocoa beans which can be bought and sold at any streetside wholesaler on any given corner in the Cocoa producing areas.  

Also, obviously, the value-added possibilities of this product are endless.  

You can process your own nuts, package them, add flavors and sell to the bakeries and grocery chains locally, or even export them.  Mac Nuts don’t go bad for over a year after processed according to the farmer.  

Plus, the farmer said local demand for Macadamia is growing significantly and he doesn’t export.

“The local demand has been plenty for me.” 

He continued, “With a farm this size, all you need is one bakery chain to buy your nuts on contract, and you won’t have to look for buyers anymore.” 

The drawbacks…

Of course, there are reasons why everyone is not growing Macadamia.  

Macadamia in Ecuador requires a VERY specific climate, not too humid, not too dry, like the one here near Los Bancos.  

Also, you won’t see any production for the first four years.  And the peak production I mentioned above won’t happen until around year eight.  But the trees live and continue to produce for 50-60 years if well maintained.  

But as a farmer with expenses and payroll there are ways to meet your daily costs for the first few years.  The trees are planted 9 meters apart and are small at first, so you can grow short-sycle crops in between until the Macadamia trees start producing.  

Where I’m at, the farmer grows Maracuya (Passion Fruit) which grows like weeds and can be sold quickly as well.  Also, most macadamia farmers have part of their farm growing Cacao (Chocolate) which is a shorter term crop which reaches peak production at 3 years of age.  

You’ll see ‘Buonamici’s Mac Nuts’ on a shelve near you soon.  🙂

And for more off-the-grid crops with huge potential in Ecuador subscribe to my weekly Ecuador Insiders Newsletter below, you can unsubscribe at any time:

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