By Michelle Pelletier Marshall, Global AgInvesting Media

(NOTE: Below is a transcription of the video interview done last week with Mark Barber, head of agribusiness investment service for Elders Real Estate in Australia. Barber spoke to their recent property for sale: Macadamia Enterprises.)

GAI News: Good day and thank you for listening in for this Global AgInvesting 15 Minutes With… interview. My name is Michelle Pelletier Marshall and I’m an editor and writer with Global AgInvesting News. Joining us today is Mark Barber, who is a head of agribusiness investment services for Elders Real Estate of Australia. Thank you for joining us today, Mark.

Today Mark is going to speak more about their latest property for sale – Macadamia Enterprises, which is located in Bundaberg Central Queensland and is owned by the Manera family.

1).  The property is on over 343 hectares, or the equivalent of 849 acres. Could you give us more of a feel for the location and the history of the property?

Sure Michelle, it’s 343 and a half hectares planted, and a bit over 390 hectares in total. The planted areas have a very high proportion of the total area, which means that there’s not many waste areas or areas that have to be managed outside the orchard, which is a real advantage.

The history of this property is that the Manera family were renowned tomato and capsicum growers, which are annual crops and a very popular crop in the area of Bundaberg and Central Queensland. The area is a renowned horticultural region for its rainfall, soil types, and water resource availability. The family was growing annual crops and decided to make the switch over to macadamia trees in about 2006, and have been progressively planting the orchards out over time, with the last planting – about 7 percent – in 2020. So the age profile of the trees is pretty unique in that there’s a spread of trees that range from 15 through to one year old, which gives it a weighted average age of about 11 years. This is relatively young for the macadamia industry in Australia at that scale. It’s the second generation of the family who are involved now, with John Jr. effectively managing the whole operation, as he has done for a number of years.

2). Could you give a broad overview of the overall macadamia nut industry in Australia?

Sure, one of the fascinating things about the macadamia tree is that it is native to Australia, so it’s uniquely placed as a premium tree nut product that’s specially suited to the conditions of Australia, and therefore is not battling pests, diseases, and soil types that it’s not familiar with. It has evolved to handle the environment and to handle the conditions in Australia. Funnily enough, macadamias weren’t recognized by Australian agriculture – when first discovered back in the 1800s – as being of particular value, and it was picked up by countries around the world. It is now grown in Hawaii, South Africa, and South America. But Australia is the second largest producer and exporter of macadamia nuts in the world behind South Africa. It’s considered a premium nut and has quite special health benefits – high in unsaturated fats and protein – which makes it a nut with very high health benefits and a convenient form of protein for consumers to eat at their leisure.

3). No discussion about agriculture is complete without mentioning sustainability. This property has had a net negative carbon emissions profile for over two years. Along that scope, could you provide more details, and also the benefits of this to the potential owner?

Sure, Michelle, the owners, being horticulturalists all their lives, recognize the value of managing the soil to to create the best possible environment for the trees to thrive – in providing all the nutrients and water-holding capacity to nurture the trees when they’re young and to maximize production when they’re old. The Maneras have always put a lot of effort into macadamia orchard management and in particular, concentrating on the soils to maximize the soil productivity.

In particular, they’ve been using a fermented mulch, which is very high in carbon, made using a range of different organic waste products from the region that is fermented over a period of time and then spread on the orchards. The effect of this has been to increase the carbon content of the soils, which means that they’re sequestering quite a large amount of carbon in the soils, but also because the soils contain additional nutrients and the biological activity breaks down some of the organic matter to make available nitrogen, their use of synthetic fertilizers also dropped as well. So they’re sequestering carbon, they’re reducing the emissions of the orchards from reducing the amount of synthetic fertilizers that are put on the soil, and because they’re not carting synthetic fertilizers large distances to put on the orchard, they are producing a lot of the fermented mulch on-site and their emissions have dramatically reduced to the point now where they’re actually a negative carbon profile.

The orchards are actually sequestering more carbon than they are emitting through the activities of the orchard in total. It’s quite unique, and quite valuable for consumers. There’s an opportunity here to take that a little bit further and get recognition by consumers of the actual sustainability of the macadamia nuts. And since the nuts are native to Australian conditions, pests, disease management, things like that are usually a little softer.

4). The Manera family also has created a new standard for yield and nut quality, correct? Please explain.

Not only are they sequestering carbon and are a net negative carbon emitter, the performance of the trees is an industry standard. The tonnages that they’re producing are exceptional and the quality of the nuts — they’ve won several awards with Marquis Macadamia Nuts, which is the largest macadamia exporter in the world.

5). There also is a state-of-the-art de-husking and sorting facility on site. How new is that and how has that helped operations?

Over the last few years, they’ve been investing in a de-husking and sorting facility on site. So when the nuts are harvested, there’s three components: there’s a kernel, a shell, and a husk that protects the nut while it’s maturing on the tree. Now, when the nuts are harvested, a lot of the husks fall off, but a lot don’t. Typically, they try and remove the husk while they’re harvesting on the harvesting machinery, but that tends to slow the harvest down a little bit and potentially leaves a little bit of nut behind, so having a state-of-the-art processing facility means that more of the nuts can be harvested, and the nuts are de-husked in the processing facility and sorted so that when they’re delivered to the processor for cracking and further value-adding, the nuts are in better order.

Also, the husks that they take off the nuts on site are used in the mulching material that they use to go back on the orchard. The capacity of the nut processing facility is substantially larger than the nuts that they produce on site and will do in the future as the orchards mature in the summer, so they have a contract to process third party nuts, which creates additional revenue for the orchard as a whole.

6). And of course, no farm is complete without water. This property comes with high and well-managed security for water. Can you explain more about what it has to offer in that respect?

There’s 1,623.6 mega liters of bore water, which is subsurface water in our terms. The water comes out of an aquifer that sits underneath the Bundaberg region, and is managed by a licensing system that is overseen by the Queensland government. They monitor the level of the water consistently and allocate against your entitlements, the amount of extractive water that you can use in any one year. Typically that’s been around about 90 percent.

But it means that the resource is actively managed by the government and the entitlement system is a property right to access the water and pump your allocated allocation each year, so that the water is sustainably managed. It’s not just pump as much as you can, and put as many bores down as you can. There’s a licensing regime and an entitlement system and an allocation system that sustainably manages the aquifer. There’s also surface water available in the region. But the security of bore water is very high.

Australia’s system of water regulation and licensing is very highly regarded around the world, and has led to a very sustainable use of the resource, but in a situation where there are tradable property rights to access that water.

7). And finally, has a price been established for this unique property? Also, in terms of expressions of interest, how are those being accepted?

The vendor is not giving any price guidance on this property for several reasons. First of all, the way that the orchards are managed and run is exceptional – it’s well above industry standard. The processing facility adds considerable additional value to the orchards, and the net carbon neutral status is an additional value. The extent of the yield profile and the tree profile is quite a special feature of the orchard. At this stage, we’ve got to let the market have a look at this and determine the price for itself. But it is exceptional.

We’re looking at a two-stage process where we’re asking for expressions of interest to be submitted by March 25. Then selected parties, based on value and conditions, will be asked to participate in the second round to conduct further due diligence and finalize their bids based on that due diligence. There’s a very comprehensive data room that’s been set up that is available to access once a confidentiality agreement has been signed. There’s a dedicated website that has also been established (www.macadamiaenterprises.com). It has a lot of information, including an information memorandum that can be downloaded. And also, the contact information for myself and Baden Lowrie, our Bundaberg agent, are on all of that material as well. We’re more than happy to have a chat with anyone that’s interested.

GAI News: Great. Well, thank you very much for all that information. I’ll add that we have a GAI News story regarding the property as well, which can be found on our website, but also that www.eldersrealestate.com.au/ would have information too. Thank you for joining us today. And to everybody, please continue to check in with Global AgInvesting News because we’ll have further stories as the sale progresses, as well as reports on other ag investing opportunities.

Watch the video interview here.

 

 

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– Michelle Pelletier Marshall is contributing editor and author for HighQuest Partners’ GAI News and Oilseed & Grain News, and managing editor for its WIA Today blog. Additionally, she is the company’s Senior PR/Media Manager. She can be reached at marshall@highquestpartners.com.