Printer Friendly

Growing excitement: agriculture sales and expectations rise.

Last January for the first time since 1986. Hawaii hosted some 7,500 farmers from across the nation at the 85th Annual Convention of the American Farm Bureau Federation, the nation's largest agricultural lobby. Mainland farmers touring Island farms were surprised to see that Hawaii farmers grow more than just sugar and pineapple, and expressed shock at the wide variety of crops being produced in the state.

"It is definitely a very exciting time for Hawaii's agricultural industry," says Alan Takemoto, government and community affairs representative for the Hawaii Farm Bureau Federation.

Almost all stakeholders are optimistic about Hawaii's agricultural growth in 2004. Part of the glow comes, no doubt, from basking in the sunny projection for both the local and national economies in 2004.

"We think 2004 will be better than ever for us. The news reports say the economy is on the rebound and more tourists are expected. That's good news for us," says Chuck Boener of Ono Organic Farms on Maui, whose organic exotic fruits grace the breakfast bar at Wailea's Fairmont Kea Lani Hotel and other luxury hotels and restaurants on Maui.

However, the industry itself is giving growers and producers a good feeling for this year and beyond. Total farm revenue of $535,853 for 2002, the last year for which statistics are available, was an increase of 2 percent over 2001, and represented an 11-year high for the industry.

Seen over the past decade, agriculture's modest annual growth has really been the result of diversified agriculture lifting the industry by its steady ascent and cushioning year-to-year declines for sugar and pineapple. Diversified agriculture, which ranges from flowers and vegetables to cattle and aquaculture, did not disappoint in 2002- posting a record S371 million in sales and accounting for almost 70 percent of total farm revenue.

The big news is the rise in sales for Hawaii's two oldest commercial crops. Sugar cane sales saw an 11 percent increase in 2002, after years of continuous erosion. While pineapple posted a more modest 4.3 percent increase over 2001, it continued to lead the industry as Hawaii's number one agricultural commodity.

Another promising trend shows in the efforts of these two traditional crops to find new value-added products and niche markets. Hawaii sugar growers are moving toward more local production of food-grade sugar, a "consumer-ready product" used in jellies, jams and beret ages, and in specialty packaging for consumers, according to Stephanie Whalen, president and director of the Hawaii Agriculture Research Center. Facing stiff competition from cheaper foreign canned pineapple, local pine growers are looking to market more specialty, fresh pineapple. Both commodities are expected to remain stable for this year, and sugar is even forecast to grow 1 percent over 2003.

Hawaii sugar growers, how ever, are worried that the U.S. Central America Free Trade Agreement, forged last December and awaiting congressional approval this year, may set a precedent for trade negotiations with other big sugar producers, such as Australia, Thailand and South Africa, that could drive prices down and put U.S. sugar farmers out of business. With its high costs for refining and shipping sugar, Hawaii would be the most vulnerable of all domestic producers.

The free-trade agreement has the attention of Gay & Robinson, one of the last two remaining sugar companies in Hawaii. General manager Alan Kennett says Gay & Robinson is pursuing the feasibility of converting its 11,000 acres on Kauai into ethanol, pending the outcome of a demonstration project.

In terms of the state's larger economy, "the days of Hawaii as an agricultural economy are behind us [and] ... the sector is no longer the concentrated growth engine it once was," says Leroy Laney, Hawaii Pacific University professor of economics and finance and economic consultant for First Hawaiian Bank. Laney, a macro economist, says agriculture has an important role in continuing to diversify the state's economy, but he does not see the sector as "a big engine of job development for the long term."

Even in the best of times, longtime challenges continue to plague the industry, including high land costs, cheaper foreign and Mainland imports, transportation costs, labor shortages and water use. Growers and producers express hope that the corner has been turned on a five year drought, global price declines and the after effects of 9/11. Rainfall levels are predicted to he normal in 2004, and summer may have above-average rainfall, says Kevin Kodama, a hydrologist with the National Weather Service. But it is still too early to tell if the Islands' extended drought conditions have ended. Private economists are also anticipating food prices to rise nationwide about 3 percent or more in 2004. While this is bad news for consumers, it's good news for the agriculture producers.

It's hard to miss the upbeat mood in the industry. And it goes beyond last year's market growth and this year's higher projections, says agricultural economist Jim Hollyer, director of Agricultural Development in the American Pacific (ADAP), a U.S. Dept. of Agriculture sponsored project that coordinates some of the new research and extension activities of the five Pacific land-grant schools, including the University of Hawaii.


"Hawaii agriculture is in a dynamic phase, with younger, more educated farmers taking up the business. Farmers are farming 'smart.' They're thinking faster. There's a more sophisticated level of business savvy and an entrepreneurial approach, including use of technology and information tools," says Hollyer.

Armed with a degree in economics and 25 years of farming in Hawaii, Larry Jefts, owner of Larry lefts Farms, is considered by many to be Hawaii's largest diversified ag farmer. Jefts declines to divulge information to confirm that claim. However, if you buy your tomatoes, bell peppers, bananas, won bok and a melon or two from Foodland, Sateway, Star Market, Times or Jimmy's Market in Kalihi, you are likely buying some of lefts' locally raised produce. The Oahu- and Molokai-raised produce of lefts and other local farmers statewide has been replacing Mainland imports, holding 35 percent to 40 percent of local supermarket shelves, according to Tish Uyehara, marketing director for Armstrong Produce, one of the state's largest produce wholesalers. However, in lefts' view, there is still more to be done.

"There's room for more farmers and I welcome them, because that keeps ag land in agriculture," says lefts, whose vegetables and melons are grown almost exclusively for the local market.

Jefts and his colleagues represent today's Hawaii farmer--part businessman, part research scientist, part entrepreneur and part environmentalist. Third-generation local farmers, such as Big Island floriculturist Eric Tanouye and Oahu's Mikilua Poultry Farms' Phyllis Shimabukuro-Geiser have made the family business a career choice. Tanouye brings a degree in horticulture from UH Hilo's College of Agriculture to running Green Point Nurseries. Shimabukuro-Geiser did her thesis on egg reproduction for her M.S. in avian science from the University of California at Davis.

Others leaped to agriculture from other industries, such as Cates International's Virginia Enos, an ex-harbor pilot and former chief officer and second-in-command on U.S. supertankers, who brought maritime knowledge and moxie to her company's pioneering aquaculture venture of raising caged moi.

A new generation of "coordinating entrepreneurs" in agriculture has also sprung up. It goes beyond the traditional "middleman" role to work with farmers to better market and promote their products. One often-cited example is Susan Matsushima of Alluvion Inc., who organized last fall's first "North Shore Agricultural Days." Daiei sponsored the well-received event, which featured tasting and product samplings from over 40 farms, ranches and small businesses in the area.

Farming "smart" today means running a business in the 21st century. Except for planting and harvesting, which are done by hand, much of the grueling monotony of vegetable farming can be done with sophisticated, computer-run machinery, which can plow, water, fertilize and administer pesticides with enough precision to eliminate waste, protect the environment and reduce production costs.

Just as precision farming is being done in the Islands, so is precision marketing. Jefts' work groups harvest only what has been placed on order, to guarantee freshness.

"There's no waste, no speculation, no produce sitting in storage waiting for a buyer," says Jefts, who also keeps an eve via the Internet on California and Florida's produce markets to monitor market gaps and pricing. "The only guesswork is how much to plant," he adds. That may not be much of a stretch for a 17th-generation farmer with four decades of farming experience.


JIT, or "Just-in-Time," is another growing trend in local agriculture, says Hollyer. As shown in Larry Jefts' harvesting process, the aim of JIT is to move products out of the field and into the marketplace quickly, bypassing storage. The local industry is retooling operations to emphasize freshness.

Hawaii Tropical Fruit Cooperative serves as a collection and prepping point for seven other smaller farms founding member, Hula Brothers, is the state's largest exotic fruit grower), to achieve economies of scale for shipping fruits, such as rambutan and longan, to mainland destinations on a same-day basis. Similarly, Eric Tanouye, using his family's Green Point Nurseries experience, and its infrastructure as one of the state's largest anthurium growers, has branched out as a wholesaler. distributing fresh cut protea for Maui growers.

The emphasis on freshness appears to have struck a responsive chord with local consumers, if the proliferation of farmers' markets it any indication. With the opening this year of a North Shore People's Open Market, run by the city and county of Honolulu, low-cost fresh produce and locally grown products will be offered every day of the week at one or more of 26 markets throughout Oahu.

Recent partnerships with businesses have created privately run markets in Manoa, Heeia, Fort Street Mall and Kapiolani Community College (KCC), among others. The KCC Farmer's Market opened in September. Co-sponsored by the Hawaii Farm Bureau and the college, it features guest chefs and attracts up to 2,000 customers every Saturday.


Last year, the newly appointed head of the state Department of Agriculture, Sandra Kunimoto, said building export markets would be a priority. Since then, in collaboration with federal partners at the USDA, "We are working to open more domestic and foreign export avenues by finding solutions to export barriers." says Kunimoto. In 2001, the last year for which figures were available, the USDA estimated Hawaii agricultural exports at $162.7 million, with $69.9 million worth going to foreign ports.

Recently, the department and the USDA developed a quarantine treatment protocol for the export of sweet potato from Hawaii to the Mainland, and plans are underway to do the same for exporting bananas and other fruits. Following recent successful efforts that allowed the export of papayas and mangos to Japan, Kunimoto is working with agricultural officials in Japan to allow the export of potted anthuriums. Japan is already Hawaii's biggest export market for high-end seafood, such as premium abalone and specialty shrimp.

Promising results with the Area Wide Fruit Fly Suppression Program a partnership involving the USDA's Research Service, the state Department of Agriculture and the UH's CTAHR--may help remove a significant export barrier for local fruit and vegetable growers. Since it began two years ago, the research program has turned fields with 60 percent infestation, resulting in total crop loss, to a virtually undetectable, less-than-1-percent infestation, according to CTAHR entomologist Ron Mau. The techniques, which destroy the pesky pests before they are sexually active, are environmentally friendly and readily manageable by farmers.

Meeting federal regulations on exports may also become less costly for farmers, with the planned commercial irradiation center at or near the Honolulu Airport slated for 2005. As a long-awaited addition to the state's sole commercial irradiator in Hilo, the strategically located facility should provide savings on interisland transport costs for farmers on Maul, Kauai and Oahu seeking to export their fruits and vegetables. California and other ag-producing states would also benefit from the sterilized fruit fly pupae program to be administered by the USDA at the new facility. In a few years, an estimated 400 million pupae should be treated each week, sent to Mainland states, and be released to control fruit fly population.


From Maui onions and Kahuku papayas to Hamakua vanilla beans and Kauai shrimp, "Hawaii has an impressive reputation for high quality food products." says Kunimoto.

Perhaps as a "coming-of age" sign, Hawaii agriculture will be the centerpiece of a proposed public market hall in Honolulu a world class signature attraction for locals and tourists alike. Following in the footsteps of successful market balls in Seattle, New York and Vancouver, the proposed "Gathering Place of Honolulu" in the Fisherman's Wharf area is being envisioned as a portal for agricultural products to entice residents and visitors to a unique food-based, culinary and shopping experience. The Department of Agriculture initiated the project in 2001 at the behest of the state Legislature. Following two promising feasibility studies, it is currently working with the Hawaii Community Development Authority to develop the concept as part of the Waterfront Development Project at Kakaako.

In today's upbeat mood in Hawaii's agriculture industry, "meet you at the Gathering Place" may soon become a reality.

COMMODITY              2001             2002
                       RANK             RANK

Pinneapples              1               1
Sugar cane               2               2
Seed crops               3               3
Macadamia nuts           4               4
Coffee                   6               5
Milk                     5               6
Cattle                   7               7
Papayas                  8               8
Algae                   10               9
Tomatoes                12               10

                   (in millions)      (in millions)

Pinneapples            $96.3             $100.6
Sugar cane             $57.8              $63.4
Seed crops             $45.0              $48.7
Macadamia nuts         $33.0              $29.6
Coffee                 $19.6              $23.3
Milk                   $26.5              $22.5
Cattle                 $18.0              $18.7
Papayas                $14.6              $11.9
Algae                  $9.7               $10.5
Tomatoes               $9.3                $9.6

Source: Hawaii Agriculture Statistics Service


COMMODITIES                      IN $Millions

Hogs                             $4.7
Eggs                             $8.7
Other livestock and crops        $10.5
Cattle                           $18.7
Milk                             $22.4
Coffee                           $23.2
Aquaculture                      $25.18
Fruits (excluding pineapples)    $23.2
Macadamia nuts                   $29.6
Seed crops                       $48.7
Vegetables and melons            $61.6
Flowers and nursery products     $92


    1    Rank of pineapple            42,000    Job statewide in
         with $100.6                            agriculture
         million in sales                       and ag-related
                                                industries or
                                                5% of total statewide

    2    Sugar companies:              8,000    Total farm
         Gay & Robinson                         acreage on Oahu
         (Kauai) and Hawaiian
         & Sugar Co. (Maui)

   55    Egg operations              870,000    Total farm
         statewide                              acreage on
                                                Big Island

   70    Aquaculture             $69,900,000    Total estimate
         operations statewide                   value of foreign
                                                export of Hawaii
                                                agricultural products

  160    Tropical specially     $535,853,000    Total farm-gate
         fruit farms statewide                  revenues statewide

5,300    Total number of        $2.9 billion    Total value of
         farms statewide                        agriculture
                                                and ag-related

Source: Hawaii Agricultural Statistics Service, State Department of
Business, Economic Development and Tourism, U.S. Department of
COPYRIGHT 2004 Hawaii Business Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Special report: agriculture
Comment:Growing excitement: agriculture sales and expectations rise.(Special report: agriculture)
Publication:Hawaii Business
Geographic Code:1U9HI
Date:Mar 1, 2004
Previous Article:Upbuilding local buildings are a hodgepodge of old and new maintenance systems.
Next Article:Mango tango.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters