Economic Evaluation of New Varieties ::

Introduction ::

The following sections compare the relative economic performance of recent releases from the macadamia breeding program and regional variety trials.

These 20-year cash flow forecasts compare both annual net cash flow and cumulative cash flow for the four recent variety releases (G, J, P & R) and compares these with established industry varieties A16 and 741. Forecasts include performance in both the Bundaberg region and the Northern Rivers of NSW.

All scenarios model establishment of a new 100-hectare farm. Irrigation establishment and operating costs are included in all Bundaberg scenarios and excluded from all Northern Rivers scenarios.

The industry average planting density 312 trees per hectare (8x4m) is assumed for all varieties other than P, which is based on the higher density of 400 trees per hectare due to the relatively small size of these trees.

This analysis has been undertaken to evaluate elite selections from the B1.1 populations in regional variety trials.

DISCLAIMER

Results presented in this report are based on yield and kernel recovery data from the macadamia regional variety trials up to the end of Year 8. Year 9 data will be included in the next update. (Macadamia regional variety trials – Series 3, Phase 2 (MC11001))

The data shown in the tables has been sourced directly from Economic evaluation of the macadamia breeding program

The project partners associated with this report include the Queensland Alliance for Agriculture and Food Innovation (QAAFI) and the Department of Agriculture and Fisheries (DAF). While every care has been taken to ensure the validity of information collected and analyses produced, neither of these project partners, nor any persons acting on their behalf, make any promise, representation, warranty or undertaking in relation to the appropriateness of findings in this report and expressly disclaim all warranties (to the extent permitted by law) about the accuracy, completeness, or currency of information in this report.

Users of this report should seek independent advice to confirm any information in this report before relying on that information in any way. Reliance on any information provided within this report or by any of the project partners is entirely at your own risk. The project partners will not be responsible for, and will not be liable for, any loss, damage, claim, expense, cost (including legal costs) or other liability arising in any way (including from the project partners’ or any other person’s negligence or otherwise) from your use or non-use of the report or from reliance on information contained in the report or that the project partners provide to you by any other means.

Cash Flows ::

The following figures show both annual net cash flow (NCF) and yearly cash balance (YCB) for varieties G, J, P and R compared with established industry varieties A16 and 741 in Bundaberg and Northern Rivers NSW.

NCF is the difference between annual cash inflows and outflows over the analysis period. In the following scenarios, this is the difference between annual income generated from nut production and costs incurred from various heads of expenditure. Yearly cash balance or YCB is the cumulative net cash flow over the analysis period.

Summary ::

Based on available yield and kernel recovery data to date, analysis of the four newly released varieties has identified their long-term economic potential compared with industry-standard varieties.

While it is apparent that varieties perform differently in different production regions, these analyses show that increasing yield and kernel recovery can result in significant long-term economic gains and farm business viability.

Variety	G	J	P	R	A16	741
Estimated mature NIS yield (t/ha)	7.52	7.07	9.99	6.1	6.56	6.78
Saleable kernel recovery %	38.20	41.10	32.60	35.20	37.20	34.90
Trees / ha	312	312	400	312	312	312

Variety	G	J	P	R	A16	741
Estimated mature NIS yield (t/ha)	8.33	6.01	9.78	8.2	6.60	6.40
Saleable kernel recovery %	39.5	41.3	32.8	36.1	38.6	37.4
Trees / ha	312	312	400^	312	312	312

Assumptions	Bundaberg (irrigated)	Northern Rivers NSW (non-irrigated)
NIS price (10-year fixed average @33% KR)	$3.80	$3.80
Farm establishment costs	$4,180,000	$4,002,500
Non-bearing fixed costs per hectare*	$2,715	$1,657
Bearing costs per hectare*	$7,798	$6,693

Variety	NPV	IRR
P (HD)	$11,786,344	13.3%
J	$10,269,956	12.7%
G	$10,066,610	12.7%
741	$7,355,470	11.0%
A16	$6,578,898	10.3%
R	$5,850,380	9.9%

Variety	NPV	IRR
P (HD^)	$13,933,636	15.3%
G	$13,766,906	15.3%
R	$12,296,133	14.8%
A16	$9,561,524	12.9%
J	$9,130,651	12.6%
741	$8,659,837	12.3%

Economic Evaluation of New Varieties ::

Introduction ::

Varieties & Assumptions ::

Table 1: Performance of varieties from regional variety trials in Bundaberg

Table 2: Performance of varieties from regional variety trials in Northern Rivers, NSW

Table 3: Assumptions for financial analysis scenarios. Price growth, inflation, depreciation, finance and taxation have been excluded to simplify analysis.

Rates of Return ::

Table 4: NPV and IRR for new and standard varieties in Bundaberg

P (HD)

$11,786,344

13.3%

J

$10,269,956

12.7%

G

$10,066,610

12.7%

741

$7,355,470

11.0%

A16

$6,578,898

10.3%

R

$5,850,380

9.9%

Table 5: NPV and IRR for new and standard varieties in Northern Rivers, NSW

P (HD^)

$13,933,636

15.3%

G

$13,766,906

15.3%

R

$12,296,133

14.8%

A16

$9,561,524

12.9%

J

$9,130,651

12.6%

741

$8,659,837

12.3%

Cash Flows ::

Bundaberg ::

Northern Rivers ::

Summary ::