Manuka plantations can be profitable - more needed to boost industry

(From left) Manuka Farming chief executive Stephen Lee, shareholder Neil Walker and Rangitikei MP Ian McKelvie were at the Manuka Farming display at the Central Districts Field Days. Photo / Supplied

There were three times as many takers as plants when the Government gave away 1.8 million mānuka seedlings this planting season, Mānuka Farming New Zealand CEO Stephen Lee says.

Mānuka, once a farmer's most hated weed, is now being planted at about 9.2 million trees a year. But more mānuka plantations are needed if New Zealand is to meet its goal of $1.2 billion in mānuka honey earnings by 2026.

Mānuka Farming New Zealand (MF) was contracted to manage the 1.8 million mānuka plants the Ministry for Primary Industries wanted to give away this season. Within three weeks it could have given away 6.4 million.

Those plants are now going into the ground in Marlborough, Northland, the Bay of Plenty, Hawke's Bay, Whanganui, Waikato and Nelson.

"I'm really feeling confident that we are the right industry at the right time," Lee said.

MF is the commercial arm of one of government's 21 primary growth partnerships, the Mānuka Research Partnership Ltd (MRPL). Its goal was to find out whether mānuka plantations are technically and financially feasible.

The partnership finishes this year, and has concluded that they are. But Lee says feasibility depends on size - at least 50ha and the bigger the better - and the right mix of mānuka cultivars.

As to whether mānuka honey can deliver the $1.2 billion a year in income, Lee said that depends. Modelling shows it is possible to make $1300 per ha from a managed mānuka plantation on marginal hill country, after a seven-year establishment period.

So the potential is there, if enough mānuka is planted. But with the country in haste to store carbon marginal hill country may end up planted in pine trees instead.

"There are too many things happening that make it difficult to make an accurate prediction," Lee said.

MF wants to be the country's go-to expert in managed mānuka plantations, and to make the full range of mānuka cultivars available to customers. It is part owned by health and lifestyle company Comvita, and, in its early years, its activities were funded by selling plants from Comvita's seven-to-10 year breeding programme.

The hybrid mānuka cultivars were grown in nurseries in the Bay of Plenty, Hastings and Auckland.

Manuka seedlings grow on at Auckland's Nga Rakau Nurseries. Photo / Supplied

MF now has a resale agreement with New Zealand's dominant mānuka seller, Kauri Park Nurseries, as well. Kauri Park grows regionally sourced seedlings - a plus for Māori groups that do not want to muddle the gene pool of their local mānuka.

"The Kauri Park stock can complement Comvita in flowering times," Lee said.

MF is compiling a panel of preferred beekeepers too.

Its four staff can assess sites, prepare plans and oversee local people in establishing plantations. They then monitor them for the four years before hives go on.

They have about 20 plantations going so far, with more in the pipeline.

It's important to plant the right mānuka cultivars so that they bloom in sequence - potentially from September to February. It's also important to have a good beekeeper with healthy bees, and to put in the right number of hives.

More hives do not mean more honey, Lee said. Last season there were too many hives. Honey production averaged 18kg per hive, and a lot more is possible.

MF has a trial planting of 100ha at Tūtira in Hawke's Bay. With 96 hives it made more than $400 per hectare in its fifth year. Better returns are likely as the mānuka matures and, if the honey is stored, to increase its ultra mānuka factor (UMF).

Hard North Island hill country only makes $300 to $400 per hectare from grazing sheep and cattle.

As long as people still prize mānuka honey, the prices should stay good. Honey with a UMF of 12 gets $45/kg wholesale. A UMF of 25 gets it to $170/kg.

Mānuka plantations could be a good use for marginal hill country. Photo / Bevan Conley

Mānuka plantations can be financially structured in all kinds of ways. The landowner can establish the plantation, work the bees and take the honey to retail. With the addition of other trees for bees the hives may not need to be moved from place to place.

"Not moving the hives is nicer for the bees. It reduces the risk of disease and is easier for the beekeeper but not necessarily more profitable," Lee said.

Or the landowner can have a share arrangement with a beekeeper. Generally the most a landowner gets in this is 30 per cent of production.

But with the expense and risk of setting up a plantation, a landowner can argue for more.

"With plantation mānuka, where there's a greater likelihood of getting better yield and quality honey because there's a planned plantation, I think there are opportunities to review arrangements," Lee said.

Or a landowner can provide the land and leave it to investors to establish the plantation, with the investor perhaps getting carbon credits as well as honey as a return.

There are a lot of possibilities, and no "one size fits all".

"We see huge potential to provide a sustainable source for mānuka honey in New Zealand, to optimise land use in areas which have returned little, to enhance the environment and to bring people back to remote areas," Lee said.