Golden crop as growers cash in on shortage
Kiwifruit growers head into a new season with a spring in their step after receiving solid market returns for their fruit.
While the very wet late winter has made it difficult to complete orchard work, growers have been encouraged by a week of sun and an early and heavy bud break which promises a big crop if weather conditions play ball.
With the 2011-12 selling season nearing an end, Zespri is forecasting growers will receive a net return of $7.21 a tray including loyalty payments for their mainstay green hayward crop, although Nelson orchardists usually get less because their fruit does not keep as long as that in the North Island. This is down slightly on the $7.35 a tray Zespri paid out last year, but Mainland Kiwi Growers Entity (MKGE) chairman Rod Fry said it would still earn them a small profit.
"It covers costs and gives a small margin which is much better than apples have been doing."
Although growers wanted it to be higher, they were aware that returns had been hit by the weak European currency where most of the fruit was sold.
However, strong prices for gold fruit - which was mostly sold in Asia - had more than compensated, with returns predicted to be $13.96 a tray compared with $12.16 received last year, he said. Prices had been boosted by a shortage of fruit, with the devastating Psa-V disease having reduced the main gold variety, hort16a, by a third or 10 million trays.
As a region still free of Psa-V, Nelson had reaped the rewards of a short market supply, he said. While gold had earned a healthy profit, there was a need for caution as there were signs consumers were starting to resist paying higher prices.
Organic fruit prices were also expected to be up a touch to $9.17 a tray from $9.07 a tray last year, he said.
"Overall, I think growers have been quite happy with payouts to date."
Richard Horrell, who grows 12 hectares of kiwifruit along with apples and grapes on the outskirts of Motueka, said he was delighted with gold returns which had helped ease a difficult financial position. It had convinced him that kiwifruit could provide a decent living and he had planted more gold by grafting vines over to new varieties G3 and G9.
Gold had benefited from being sold in yen, with foreign exchange losses amounting only to 12 cents a tray compared with 46c for green fruit, he said. However, with the dollar remaining high, Zespri was running out of forward cover to protect growers from a strong currency.
But Zespri had done a "good job in a bad situation" and given growers some surety.
It had also managed to sell fruit quickly despite tough trading conditions in Europe.
Mr Horrell said he expected to receive about $6.20 a tray for his green fruit as Nelson growers did not get storage bonuses. This was only just above the cost of production, "but we can survive on that and we are not losing great wads of money like we are with apples".
He had just bulldozed a hectare of royal gala as the business continued to reduce its apple holdings.
Green kiwifruit returns relied heavily on good crop yields which were inconsistent in Nelson, which was another reason why now half his orchard was in gold varieties which were better croppers, he said.
It was vital growers did everything to keep Psa-V out of the region for as long as possible by observing a ban on using imported plant material and pollen and avoiding putting their vines under stress.
It had made him think twice about buying a second-hand tractor from the North Island because of the risk of bringing in the disease.
"Realistically the chances of keeping it out long-term are pretty slim because it's such a potent brew. The scientists have told us it can live on steel for a week and on vegetable matter for two weeks."
Mr Fry said MKGE intended sending out a questionnaire to growers shortly to check how often they were monitoring their orchards and spraying with copper to keep them clear of disease.
He was confident most were up to date and doing what was recommended by Kiwifruit Vine Health, despite one of the wettest Augusts he could remember which had made tractor work marginal and slowed pruning. Several severe frosts had forced growers to turn on their sprinklers which had limited the damage to just some minor leaf burning.
But they had to be on guard with such a big and early bud burst which promised plenty of fruit, he said. The rain had promoted a lot of growth which could mean that vines became overloaded and would require more thinning than normal later in the season.
MKGE manager Glynis Ellery said it was very early days but this season's crop was likely to be similar to or slightly ahead of the 3.21 million trays produced last season. Green was predicted to be down a little to between 2.5 million and 2.6 million trays as growers replaced older blocks with new varieties.
Gold was forecast to increase by at least 50,000 trays to 600,000 on the back of a bigger G9 crop, while organic fruit was set to rise by almost 10,000 trays to 80,000.