Hawaiian farm succeeds by diversification and good fortune

For starters, Keolanui says it was “pure luck” when he was working at a restaurant and met the farm’s other co-owner, Edmund Olson. “I was fortunate enough 20 years ago to meet Ed completely by chance,” Keolanui recalls. Olson, a businessman, had just purchased his first parcel of land on the Big Island and needed someone to clear it. Keolanui took on the job and went on to work for Olson part-time for 15 years.

OK Farms grows everything from coffee to tropical fruits, but its biggest crop is macadamia nuts. The farm has some 20,000 macadamia nut trees covering 230 acres.

About 10 years ago, Olson – who has since become one of Hawaii’s largest private landowners – purchased a 500-acre property and formed OK Farms with Keolanui. “He’s the financial backbone of the operation. We could never have gotten off the ground without him,” says Keolanui. “Like most farmers are well aware, if you start from a huge deficit, then you’re constantly trying to dig yourself out of a sand hole. In our case, we were blessed by the fact that Ed had all of this land, and together we had this vision for a farm.”

That vision for a diversified farm has been realized and continues to grow. About half of the parcel (250 acres) was already planted in macadamia nuts, and macadamia nuts continue to represent the core of the farm. “For the other 250 acres we had a vision of planting it out as diverse as possible,” explains Keolanui. Over the last five years a number of different citrus (including oranges, tangerines, lemons and poha berries) were installed on about 20 acres; along with about 8 acres of heart of palm; an array of tropical fruits such as lychee, longans and rambutans; and even coffee beans.

“Marketing is as big a part of farming as growing the stuff,” states Keolanui. “In fact, in my opinion, the growing of the products is the easier part. There are a couple of tricks you need to learn, and some bumps in the road you need to get through, but here in Hawaii the growing of most things is pretty straightforward.” He cites the favorable climate and adequate rainfall as two huge advantages of farming in Hawaii. “On our 500 acres, we don’t have 1 foot of irrigation,” he points out, thanks to the 130 inches of annual rainfall.

Troy Keolanui, co-owner of OK Farms, picks Mineola Tangelos.

OK Farms also focuses on tree crops, so there’s no annual planting required. “The only thing that comes close is our yellow-gold pineapple,” says Keolanui. “We have about 10 acres of that, and that’s something you need to replant every two or three years.”

Because the largest crop – now up to 270 acres – on the farm is macadamia nuts, it’s those trees that require the largest amount of work, he says. Keolanui notes that, 20 years ago, Hawaii was the world leader in “mac nuts,” as they’re referred to. “Then, suddenly everyone started catching up and Hawaii is in the backseat production-wise to places like Australia and South Africa and South America,” he explains. “The thing we take pride in about our mac nuts is the number one quality we have here in Hawaii.”

At OK Farms, one of the reasons for that quality advantage is because the nuts are largely harvested by hand. “The way we do it here is that the nuts fall on the ground when they’re ripe and they get picked up and bagged. There’s a lot of labor involved,” Keolanui explains. “The fields that we have here in Hilo just aren’t suited for mechanical harvesting. The rows are short and hilly, and because we get a lot of rain, there can be slippery areas.” He says he’s visited large macadamia orchards in Australia that were very flat: “They were perfectly manicured and they run these huge harvesters through; it’s very impressive.” However, the extra hand labor does allow for greater quality control than harvesting by machine, he feels.

In Hilo, the macadamia trees tend to flower in November, December and January, and then a crop is harvested about six months later. Because the nuts are harvested from the ground, it’s important to control vegetation. “You have to keep the area below the tree clear, or otherwise you won’t be able to pick those nuts up,” Keolanui emphasizes. “We hate to spray herbicides, everyone does, but if we didn’t, we wouldn’t be able to see the nuts at harvest. We boom spray right down the rows and leave a grass strip in the middle,” he explains. OK Farms uses three John Deere tractors with 10 and 15-foot mow decks, as well as large Rears double-boom sprayers. Spraying is done three to four times per year.

The trees are trimmed every two to three years on a rotating basis, largely to prevent damage during spraying. “The pruning we do is mostly skirting – just keeping the trees up off the ground,” he says. This is important to avoid contact between the tree foliage and herbicides used to keep the grass down.

While the grass poses a challenge to harvest, Keolanui says that there aren’t often problems posed to the macadamia trees by insects or disease. “We’re fortunate here that we don’t have the same kinds of pests that they have in other parts of the world,” he explains. He does note that felted coccid is a microscopic scale insect that can damage the tree and has recently shown up on the Big Island. “We sprayed a soap spray for that,” says Keolanui. “There are different nut borers and other various problems from time to time, but in 10 years of operation there has been nothing that has caused us to go through our orchard and spray insecticides. We’ve been lucky; we count our blessings for that, and we don’t take it for granted.”

Workers at OK Farms in Hilo, Hawaii, load bags of freshly harvested macadamia nuts onto a trailer. One of the biggest benefits of farming in Hawaii is the near perfect weather for working.

There has been some interplanting where trees have died off (primarily using the same macadamia variety, #344), but for the most part it’s been a matter of caring for the trees that were already on the land, says Keolanui. “They needed a lot of work – they needed a lot of trimming, and they were lacking a lot of fertility.” The increased cost of fertilizer and fuel, especially in Hawaii, has led many farmers to cut back on fertilization, he notes. “In the end, though, that’s going to hurt you. Mac nuts require a host of micronutrients – things like boron, magnesium, copper and iron.” Since these micronutrients are especially expensive, Keolanui says the goal at OK Farms has been to use a combination of “basic” fertilizers with specialized fertilizers as budgets allow. “Right now, the prices that growers are getting for the nuts have come up and that helps a lot,” he adds.

Tropical fruits have proven another successful area for OK Farms. “For us, lychee and longan have been the biggest,” says Keolanui. Lychee is an Asian fruit that’s been a popular crop in Hawaii for more than 100 years, he says. “We have about 1,200 trees, and all of what we grow stays within Hawaii,” he relates of the local demand for lychee.

“It is a tricky crop to grow, and there’s a little bit of a learning process on getting them to flower,” Keolanui explains. “A lot depends on the weather, but if you get a good crop you can get a premium price for it.” In Hawaii, the harvest is primarily during May, June and July. The trees are skirted every two or three years, but there isn’t as much of a need to keep the ground bare beneath the trees, he notes.

Longan is somewhat similar to lychee, Keolanui states: “It’s a small round fruit that grows in small bunches, and it’s extremely sweet with a seed in the middle. It’s also known as Dragon Eye, because if you peel off the skin it looks sort of like an eyeball inside.” However, that’s not the most peculiar thing about the tree, he adds. “The neat thing about longan is that it can be induced to flower with a chemical, so we can stagger that fruit all year long. A farmer loves to control his tree!” says Keolanui. This fact was first discovered in China when people noticed that longan trees near a particular temple were flowering at unusual times: “They figured out that it was because of the firecrackers they were constantly setting off there, and it turns out that potassium chlorate is a primary component in gunpowder.”

Because potassium chlorate is a volatile product, getting it into Hawaii can be challenging and expensive, but the benefits far outweigh the hassles, say Keolanui. The chemical is sprinkled in powder form beneath the drip line of the longan trees and stimulates flowering. “About two months later, poof, you have a full flowering that actually requires the pruning of the flowers because the tree just can’t handle all of the flowers,” he explains.

After harvest, the tree is allowed to rest and re-flush; once the flush has hardened off, more powder is applied. The result is about two harvests every year and a half. OK Farms has about 650 longan trees, and uses about 25-by-30-foot spacing for this crop, resulting in 80 to 90 trees per acre. “Those trees at full size will put out up to 500 pounds of fruit each,” he says.

A much smaller spacing – about 5 by 8 feet – is used for one of OK Farms’ newer products: coffee. “It’s been a learning curve. A lot of attention has been given to Kona coffee, but we’ve had a lot of success with the coffee we’ve grown here in Hilo, as well. I believe that with coffee a lot has to do with the drying and handling and roasting, and drinking the product fresh. There’s just so many steps involved with coffee that it’s been a real learning experience,” says Keolanui. The beans are taken down to “parchment” on the farm, and then brought to Kau Farms (another farm owned by Olson), which has milling and roasting facilities.

The addition of coffee is another effort to diversify the farm. Keolanui explains, “Our goal has been not only to figure out what grows well, but what we can market well. And being diversified has lent itself well to the relationships we’ve developed with the larger wholesalers, because they really like it when a farm can supply them with eight or nine different things rather than just one thing.”

OK Farms’ macadamia nut crop is sold to the Hamakua Macadamia Nut Company, which is the only processor on the island, and the only processor in Hawaii that buys and sells only 100 percent Hawaiian nuts. “I understand business, and I know other processors feel the need to bring in nuts from other countries that are cheaper and maybe lower quality and sell them under the Hawaiian name, but I feel that the Hawaiian name is important and something we need to protect,” says Keolanui.

Much of the rest of the crops from OK Farms is sold to several different wholesalers, who have proven to be good to work with. “As all farmers know, it takes years to develop those relationships and that trust,” he explains. “We do have our own local distribution network here in Hilo where we sell to various stores, but we try to stay away from that because we’re really not set up to distribute on a large level.”

In addition to good marketing and sales, running the farm efficiently is another key to profitability, says Keolanui. To that end, he runs the 500-acre farm with just three additional employees (additional workers are brought in for some harvest seasons). “If you want to make money in this business, you just can’t have too many people sitting at the desk; I think most farmers would agree with that,” he says. “That means that I personally have to get out there and jump on the tractor a lot of times, but that’s what I love to do. I love to be out there with a small crew.” Of course, who wouldn’t want to be working outside in Hawaii?

OK Farms has embraced agritourism and welcomes visitors to the property. This has brought in some additional revenue and, along with educational tours, has helped the community become aware of what’s happening on the farm. Keolanui even installed a soccer field (his other passion) that now serves as the home field to the local college and high school teams. “It was just a dream that I had and the opportunity presented itself, and it’s turned into a really positive thing. We don’t make a dime off the field, but it brings people out to the farm and connects it to the local community.”

Keolanui says he has always had an interest in agriculture, but could never have envisioned where a job in farming would lead him. “We started this farm as an experiment, and it’s turned into something very productive. It’s turning a profit now, and I’m now paying back some of the debt I owe to my partner. It’s a constant learning experience, and I’m still learning. I’m pretty lucky.”

Patrick White is a freelance writer and editor who is always on the lookout for interesting and unusual stories.