How Macadamia Pricing Works

Apr 15, 2024 | New

In the intricate world of macadamia farming, understanding the nuances of industry terminology is crucial for growers, especially when it comes to the sale and valuation of their produce. Two key concepts in this realm are “NIS” (Nut In Shell) and “kernel,” along with the critical metrics of Total Kernel Recovery (TKR), Saleable Kernel Recovery (SKR), and Reject Kernel Recovery (RKR). These terms not only influence how growers sell their nuts but also significantly impact their income.

Nut In Shell (NIS) vs. Kernel

NIS refers to the whole macadamia nut as it is harvested from the tree, encased in its hard shell. The kernel is the edible part inside the NIS, which is what consumers and processors ultimately desire. The value of NIS largely depends on the quantity and quality of the kernel it contains, which is where TKR comes into play.

Total Kernel Recovery (TKR)

TKR measures the percentage of kernel weight to the total weight of NIS. For instance, a 10g NIS yielding a 3.3g kernel results in a TKR of 33%. This figure is pivotal because it indicates the efficiency of kernel extraction from NIS, which varies significantly across different macadamia varieties. Varieties can show a TKR ranging from 28% to 45%, highlighting the importance of variety selection in orchard management.

Premium, Commercial, and Reject Kernel Recovery

TKR is further delineated into three categories:

  • Premium Kernel Recovery (PKR): High-quality kernels meeting specific market standards.
  • Commercial Kernel Recovery (CKR): Kernels that are saleable but don’t meet premium standards.
  • Reject Kernel Recovery (RKR): Kernels that are unsaleable due to quality issues.

Growers receive payment for premium and commercial kernels, collectively referred to as Saleable Kernel Recovery (SKR). Industry averages suggest a breakdown of 97% SKR and 3% RKR.

Pricing Implications

The price a grower receives is directly tied to the SKR and RKR rates, with higher SKR and lower RKR fetching better prices. However, processors often base their pricing on a nominal SKR and RKR assessment, typically around 33% SKR and 2% RKR at 10% moisture content, to standardise buying.

Source: Adapted from AMS Australian Macadamia Society

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