Export Commodities

VALUE CHAINS

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Export Commodities

Hawai'i Island

Export commodities represent a significant portion of Hawai'i Island's agricultural output, contributing substantially to the island's economy and global reputation. These high-value crops leverage Hawai'i's unique growing conditions and brand recognition to compete in global markets. For this value chain analysis, the category encompasses five main subcategories: Floriculture and Nursery Products, Coffee, Macadamia Nuts, Papaya, and Aquaculture. Each of these sectors has its own unique characteristics, challenges, and opportunities within the broader context of Hawai'i Island's agricultural exports. It's important to note that while these crops are primarily oriented towards export markets, they also play a role in local consumption and tourism-related purchases. The balance between export and local sales can vary significantly between products and producers. Additionally, the export-oriented nature of these crops means they are particularly susceptible to global market fluctuations, trade policies, and international competition.

The floriculture and nursery industry is a vital part of Hawai'i Island’s agricultural sector, contributing significantly to the local economy and export markets. In 2020, Hawai'i Island accounted for approximately 66% of the state's total floriculture and nursery sales, valued at $62.7 million. The island’s diverse microclimates allow for the production of a wide range of tropical flowers, potted plants, and foliage, which are in high demand both locally and globally. Among the key crops are anthuriums, orchids, and tropical foliage, with over 6.1 million orchid stems and 2.3 million anthurium stems produced in 2020. The island is also known for its exotic nursery plants, such as vireya rhododendrons, and emerging industries like cacao seedlings for chocolate production.

Pest and disease management pose major challenges to this sector. The banana bunchy top virus has significantly impacted ti leaf production, a culturally and ornamentally important plant. The orchid industry has similarly struggled with pests such as thrips and various fungal diseases. Labor remains a critical issue, with high costs and a shortage of skilled workers affecting production efficiency, particularly for tasks such as propagation and grading. Many floriculture and nursery operations rely on family labor or a small, core group of skilled employees supplemented by seasonal workers.

Distribution channels for Hawai'i Island's floriculture and nursery products include both local and international markets, with air freight playing a critical role in exporting perishable goods like cut flowers. Cooperative efforts, particularly those led by the Hawai'i Floriculture and Nursery Association (HFNA), help aggregate products from smaller growers for export. Processing for this industry involves post-harvest handling and grading, especially for delicate products like cut flowers. Meeting phytosanitary requirements for export is an essential aspect of the value chain, with inspection facilities at Hilo and Kona airports ensuring compliance.

The market for Hawai'i Island floriculture and nursery products is driven by the island’s unique tropical flora, the "Grown in Hawai'i" brand, and increasing demand for sustainable products. Online sales, agritourism, and direct marketing strategies have become important avenues for growth, especially in the wake of the COVID-19 pandemic. The industry is leveraging its exotic appeal and sustainability initiatives to tap into new markets, while local sales are driven by the landscaping industry, tourism, and individual consumers.

Key Takeaways:

Hawai'i Island accounts for 66% of the state’s total floriculture and nursery sales, valued at $62.7 million in 2020.
Major challenges include pest and disease management, labor shortages, and the high costs associated with meeting export requirements.
Key crops include anthuriums, orchids, and tropical foliage, with over 2.3 million anthurium stems and 6.1 million orchid stems produced annually.
Distribution relies heavily on air freight, and cooperative efforts help smaller growers meet export demands.
Online sales, agritourism, and a focus on sustainability have opened new market opportunities for Hawai'i Island’s floriculture and nursery sector.

Coffee, particularly Kona coffee, is one of the most valuable and globally recognized export crops from Hawai'i Island. Known for its distinctive flavor and premium quality, Kona coffee is cultivated primarily in the Kona District and the Ka'u District. The unique volcanic soils, microclimates, and traditional farming methods contribute to the coffee’s reputation as a specialty product. In 2023, utilized coffee production in Hawai'i totaled 19.2 million pounds (cherry basis), with a crop value of $48.2 million. However, the industry faces significant challenges, including labor shortages, weather disruptions, and pests such as the Coffee Berry Borer (CBB) and Coffee Leaf Rust (CLR), which have led to reduced yields and increased production costs.

Production on the island primarily takes place on small, family-run farms, with the average farm size ranging from 2 to 7 acres. Despite these small operations, the total output of Kona coffee is considerable. Coffee is typically grown at elevations between 700 and 2,500 feet, where the sunny mornings and cloudy or rainy afternoons create ideal conditions for growth. However, recent challenges, including drought, invasive species, and wildfires, have exacerbated production difficulties. Despite this, farmers continue to adopt integrated pest management strategies and experiment with different processing methods to maintain their competitive edge.

In terms of processing, Hawai'i Island coffee is predominantly wet-processed, with various grading standards set by the Hawai'i Department of Agriculture (HDOA). Processing facilities like the Ka'u Coffee Mill support local farmers by providing advanced processing techniques, including honey and natural processing, which allow for further differentiation in the specialty coffee market. However, rising labor costs and seasonal worker shortages remain significant concerns.

Distribution of coffee relies heavily on both local and international channels. Air freight is critical for exporting roasted coffee, while green coffee is shipped to international markets, with Japan being one of the largest consumers. Marketing strategies for Hawai'i Island coffee focus on leveraging its geographic origin, quality, and sustainability practices. Direct-to-consumer sales, particularly through e-commerce, have become an increasingly important revenue stream, especially post-pandemic, allowing farms to sell directly to coffee aficionados worldwide. Kona coffee's high value has also made it a target for mislabeling and counterfeiting, which presents an ongoing legal challenge for the industry.

Key Takeaways:

Hawai'i's coffee production in 2023 totaled 19.2 million pounds, valued at $48.2 million, despite facing challenges like Coffee Leaf Rust and Coffee Berry Borer.
Production is concentrated in Kona and Ka'u, where small farms contribute significantly to Hawai'i Island’s coffee output, but the industry faces labor shortages and rising costs.
Processing includes strict grading standards, with some facilities offering advanced techniques like honey and natural processing to help differentiate products in the specialty market.
Distribution spans local and international markets, with air freight playing a crucial role for exports. Marketing strategies emphasize the "Kona Coffee" brand, geographical origin, and sustainable practices, with e-commerce becoming increasingly important.

Macadamia nuts are one of Hawai'i Island's most iconic and economically significant export crops, recognized for their premium quality and unique flavor profile. Introduced from Australia in the late 1800s, macadamia nut cultivation has flourished in Hawai'i's volcanic soils and diverse microclimates, particularly in the Ka'u and Hilo districts. While recent years have seen a decline in production due to disease and pest pressures, macadamia nuts continue to play a vital role in the island's agricultural economy. In 2022, the state’s total utilized macadamia nut production fell by 29%, with a 5% reduction in bearing acreage, resulting in a total crop value of $33.2 million, the lowest since 2015. Despite these challenges, Hawai'i Island remains a global leader in macadamia production, contributing a significant portion to Hawai'i’s total macadamia nut output.

Macadamia nut production on Hawai'i Island is a blend of large commercial orchards and smaller family-run farms. The industry faces several key challenges, including the long maturity period of the trees, which can take up to 7-10 years to yield commercial quantities of nuts. Pest management, particularly against the macadamia felted coccid, is an ongoing issue, with Integrated Pest Management (IPM) and research into resistant varieties offering potential solutions. The economic viability of smaller producers remains fragile, especially given fluctuating yields and pricing. Nonetheless, the industry benefits from a well-established infrastructure for aggregation and processing, which supports both large and small-scale producers.

Processing is a crucial part of the macadamia nut value chain. Large processing facilities on Hawai'i Island handle the critical post-harvest stages, including husking, drying, cracking, and sorting. The island’s processors have developed proprietary techniques for roasting and flavoring macadamia nuts, adding value to the raw product and contributing to the premium pricing associated with Hawaiian macadamias. Processing challenges include high energy costs, which have led some processors to explore renewable energy solutions like solar drying. The development of value-added products, such as macadamia nut oil and confectionery items, has helped diversify revenue streams for the industry.

Distribution of macadamia nuts relies on both local and international markets, with exports to North America, Asia, and Europe playing a significant role in revenue generation. For domestic sales, the tourism industry is a key driver, with macadamia nuts being a popular souvenir item sold in airports, hotels, and gift shops. Direct-to-consumer sales, especially through e-commerce, have grown in recent years, allowing smaller producers to reach a global market. Marketing efforts for Hawai'i Island macadamia nuts emphasize their origin and quality, with increasing focus on sustainability and ethical production practices, appealing to environmentally conscious consumers. Single-origin macadamia nuts from specific regions on the island are becoming more common, adding a premium element to the product.

Key Takeaways

In 2022, macadamia nut production in Hawai'i decreased by 29%, with the total crop valued at $33.2 million, reflecting challenges from pests, diseases, and rising production costs.
Production is concentrated in the Ka'u and Hilo districts, with both large commercial orchards and smaller family-run farms contributing to the industry. Pest management, particularly against the macadamia felted coccid, remains a significant challenge.
Processing is critical to maintaining the quality and value of macadamia nuts, with large facilities handling husking, drying, and roasting. High energy costs in processing have led to exploration of renewable energy solutions.
Export markets are key revenue drivers, but domestic sales are boosted by the tourism industry. Direct-to-consumer sales via e-commerce are growing, and sustainability is becoming a central theme in marketing efforts.

Papayas remain a significant staple crop for Hawai'i Island, though recent years have seen a mixed performance in terms of production and value. In 2023, the statewide value of utilized papaya production reached $6.5 million, showing a slight improvement of 4% from the previous year. However, production volumes decreased by 12% to 10.25 million pounds, with utilized production falling by 3% to 9.54 million pounds. The industry experienced a record average price of 68 cents per pound in 2023, marking a slight increase from previous years. While these data highlight fluctuations in production and market conditions, the long-term trends reveal challenges that papaya growers face, including volatile production levels and market prices.

Production on Hawai'i Island accounts for the majority of the state’s papaya production, with a substantial portion of the state's bearing acreage located here. The USDA Agricultural Census of 2022 reported 473 acres of papaya-bearing land on the island, a significant reduction from 766 acres in 2017. This decline mirrors a broader statewide trend of diminishing acreage and fluctuating yields, largely attributed to environmental challenges such as volcanic activity, flooding, and pests. In 2019, papaya-bearing acreage statewide dropped to 690 acres, reflecting a 14% decline, while the yield per acre increased by 31%, indicating that farmers are managing to sustain higher productivity on smaller plots of land. Papayas harvested but not sold also pose a challenge, with 710,000 pounds remaining unutilized in 2023.

While the market price for papayas has improved in recent years, the challenges that growers face have been significant. The effects of natural disasters, particularly the 2018 Kilauea volcanic eruption and heavy flooding in major growing regions, have caused a reduction in acreage and persistent impacts on production. The erratic weather conditions, combined with an increase in pests and diseases, have constrained the industry’s ability to rebound fully. Nonetheless, the strong demand for Hawaiian papayas, known for their quality and unique flavor profile, offers opportunities for recovery as farmers explore ways to stabilize yields and enhance market access.

Key Takeaways

In 2023, the value of utilized papaya production reached $6.5 million, a slight increase from the previous year, while total production decreased by 12%.
Hawai'i Island accounts for the majority of the state’s papaya production, with the USDA reporting 473 acres of papaya-bearing land in 2022, a significant decrease from 766 acres in 2017.
Environmental challenges, including volcanic activity, flooding, and pests, have contributed to fluctuations in production and declining acreage.
Papaya farmers are increasingly focused on improving yields per acre and stabilizing production despite the reduced land area under cultivation.
The long-term trends reflect both the volatility of papaya production and the potential for recovery as market conditions improve.

Aquaculture is a rapidly expanding industry on Hawai'i Island, leveraging the island’s abundant water resources, ideal climate, and growing demand for sustainable seafood. The aquaculture sector contributes significantly to Hawai'i's agricultural economy, with the 2022 value of aquaculture sales on the island reaching approximately $69.3 million, accounting for about 80% of the state's total aquaculture revenue. Hawai'i Island is home to a diverse range of aquaculture products, including finfish (like tilapia and moi), shellfish (such as abalone and shrimp), algae (notably spirulina and astaxanthin), and ornamental fish for the aquarium trade. The sector benefits from innovative production methods, including the use of geothermal energy at the Natural Energy Laboratory of Hawaiʻi Authority (NELHA), which supports several aquaculture operations using deep seawater to manage temperature and nutrient requirements.

Despite its growth, aquaculture on Hawai'i Island faces several challenges. High input costs, particularly for feed and energy, remain an ongoing concern for producers. In addition, the industry must navigate stringent environmental regulations to minimize its impact on Hawai'i’s ecosystems, and there are occasional tensions with traditional fishing practices. Labor shortages and logistical difficulties associated with the island’s distance from major markets also present obstacles. However, the sector's potential for continued expansion remains high, driven by increasing demand for sustainable, locally sourced seafood, and the development of value-added products like algae supplements and processed seafood.

The distribution of aquaculture products from Hawai'i Island involves both local and export markets. Export markets, particularly in the U.S. mainland and Japan, are crucial for high-value products such as ornamental fish, while local markets, including restaurants and hotels, play a vital role in driving demand for fresh seafood. The use of air freight is critical for maintaining the freshness of perishable products, while refrigerated trucks and inter-island barges support local distribution. The marketing of Hawai'i Island aquaculture products emphasizes sustainability, quality, and the Hawaiian brand, which carries significant weight in international markets. With the tourism industry rebounding after the COVID-19 pandemic, demand for locally produced seafood has steadily increased, further highlighting the sector's potential for growth.

Key Takeaways:

In 2022, Hawai'i Island's aquaculture sector was valued at $69.3 million, representing 80% of the state’s total aquaculture production revenue.
Key aquaculture products include finfish, shellfish, and algae products.
The Natural Energy Laboratory of Hawaiʻi Authority (NELHA) plays a crucial role in supporting aquaculture by providing deep seawater for temperature control and nutrient supply.
High input costs, environmental regulations, and logistical challenges are among the primary issues facing the aquaculture sector, but the industry shows strong growth potential, especially in the sustainable seafood and health supplement markets.

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