Kiwifruit industry bounces back from 'heartbreak' of Psa

At the height of the Psa outbreak, kiwifruit orchard prices fell to bare land value.
CHRISTEL YARDLEY/FAIRFAX NZ

At the height of the Psa outbreak, kiwifruit orchard prices fell to bare land value.

It was a discovery that could have crippled New Zealand's kiwifruit industry, but almost seven years after bacterial disease Psa first appeared in orchards, exports are booming and orchard prices are at record highs.

Last year kiwifruit marketing company Zespri recorded more than $2.2billion in global sales, chief executive Lain Jager told farmers and agribusiness professionals at the Smaller Milking and Supply Herds conference in Inglewood.

By 2025, the company hopes to hit a sales target of $4.5b.

Zespri chief executive Lain Jager.

Zespri chief executive Lain Jager.

Orchard values are also soaring - earlier this month two Te Puke blocks topped $1million per hectare, smashing the previous record of $850,000/ha.

READ MORE:
Record kiwifruit orchard sale cracks $1 million mark
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But turn the clock back nearly seven years and things were very different, Jager said.

As Psa ravaged Bay of Plenty orchards, all but wiping out the higher-value Hort16A gold variety, there was fear the industry may not recover and return to profitability.

"It was heartbreaking to watch the progression across kiwifruit-growing regions," Jager said. 

"Vines just started dying and that variety of gold - which was our higher-value product - was dead and gone.

"We didn't know if green vines were going to die, too.  We were seeing extensive symptoms on green vines that spring."

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At the height of the outbreak, growers cut entire gold crops and orchard prices plummeted to bare land value.  

But behind the scenes a massive, co-ordinated response was underway, Jager said.

"Within weeks, the industry had formed a response plan.  We made a request to government for $25million in funding to be matched dollar for dollar by the industry.

"We set up an independent body, Kiwifruit Vine Health, to manage the research programme and biosecurity response, and to implement an aggressive containment strategy." .

While the initial focus was on understanding how widespread the problem was and mitigating the risk of spread through orchard hygiene, finding a way through the outbreak and back to profitability was always the end goal, Jager said.

"There was a lot going on in the lab.  Bioassays showed some varieties were more resistant to Psa, the new Gold3 variety was one of those."

Within a year of the Psa discovery, growers had started to graft on the new Gold3 variety, which has proven to be tolerant to Psa. Not only that, it is 30 per cent more productive than the Hort16 variety. 

"People grafted their orchards and crossed their fingers and it worked," Jager said.

"It took a lot of fortitude and a lot of research and development - we had to learn to farm in a Psa environment but we did it and we've come out the other side."

Industry returns rose 47 per cent from 2014 to 2017, largely driven by the success of the SunGold variety which was expected to generate about $40b over the life of the plant variety right.

Returns to growers last season were more than $50,000 a hectare for green and nearly $100,000/ha for gold and as kiwifruit prices recovered, so did optimism, Jager said.

Orchard values - about $450,000/ha for gold and about $250,000/ha pre-Psa - began to climb and showed no signs of slowing.

"When we had Psa, I thought asset prices would remain low for a decade because people would have an elevated sense of risk but I was just so wrong," Jager said.

"A green orchard at the moment is about $300,000-$400,000/ha."

Gold orchards were being sold for $700,000 to $1millon per hectare, although Jager questioned the sustainability of such high prices.

"Any kind of farming has ups and downs, it doesn't just keep going up," he said.

"But to be where we are today after taking the hit that we did [from Psa] is incredible."

 - Stuff

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