Kiwifruit
Kiwifruit
Model Description
This report covers kiwifruit orchards in the major growing areas of New Zealand. The model budget represents an established owner-operator property in the Bay of Plenty, an area that produces around 80% of the New Zealand kiwifruit crop.
The text reflects all kiwifruit-growing districts, with a brief specific comment for each. Financial data relates to the year ended 31 March.
Kiwifruit income spans two financial years, with the residual payment for each crop occurring in the following financial year. For example, final payments on the crop harvested in May 2001 will occur in the 2002/03 year.
* Existing vines converted to new variety in July 1998. First production occurred in May 2000.
Key Points
- Kiwifruit growers had a good year in 2001/02 with good yields and improved prices for green and organic fruit.
- Market conditions are good for the 2002 crop but growers expect lower yields to reduce their revenue.
- The model orchard produced a net trading profit of $70,000 for the 2001/02 year and forecasts $40,000 for the 2002/03 year.
- Green fruit now provides 85% of industry revenue, gold about 11%, and organic fruit about 4%, with the gold proportion expected to rise as orchards mature.
- The increasingly diverse revenue streams are creating new and controversial issues around grower payments.
Physical Factors
Northland
The Northland 2001/02 growing season was characterised by wet conditions during November and December. The rainfall in November was 58% higher than the previous year, and December’s rainfall was double the average. This caused some disease problems and reduced fruit size.
Drier, mild conditions occurred for the rest of the season, except for significant rain in the last two weeks of May, which upset fruit flow during late harvest.
The Northland crop is now mainly the gold variety. Where high crop loads were carried on this variety, the 2002 crop fruit size has been poor despite extensive fruit thinning. The fruit size enhancer commonly used on the gold variety did not give the fruit size response growers expected. Many early crops have had 40% or higher reject rates mainly for small fruit.
High crop loads were allowed to set on gold, based on the expected response to applying the fruit size enhancer – a key tool in gold management. Where crop loads were lower, fruit size was good. Conversion of gold crops on T-bars to steel pergolas is steadily taking place. The green crop has grown well this season and presented few problems.
The Northland gold crop harvested in 2001 suffered significant pitting in coolstorage resulting in considerable repacks and fruit losses.
Although a ship loaded export kiwifruit at Whangarei in June, there was insufficient fruit of the range of sizes and varieties required to fill it, and the ship completed loading at Tauranga.
Bay of Plenty post-harvest operators are now established in Northland and pack a significant quantity of fruit, particularly the green variety.
Auckland
Auckland’s kiwifruit orchards are widely spread across the district, and have had variable results for their 2002 harvest.
Some growers report increased yields of smaller sized fruit and others have lower yields but larger fruit size than in 2001.
Many orchards in the region harvest their fruit relatively early. The early harvest and a dry autumn probably contributed to smaller fruit size where this occurred.
Growers have been girdling to increase fruit size, and fine tuning summer pruning to keep vine canopies open. Rejects are mainly small sized fruit of little value. Harvesting weather was good until rain in late May delayed picking of the last few orchards.
Bay of Plenty
The early season growing conditions were cool, wet and gloomy. This caused small fruit size due to reduced bee pollination and poor fruit growth in the wet, low-light conditions. Some fruitlets were also affected by wet weather diseases and fell off or were blemished, becoming unmarketable. Growers have been doing additional fruit thinning to remove the blemished fruit and discard the smallest fruit.
A number of growers started the season with low flower numbers, probably due to the cool, wet spring and dull, wet conditions late last season.
A few orchards were affected by spring frost. The frosted orchards were not the low-lying orchards most commonly susceptible to frost. However, cold spring temperatures caused flower abortion and therefore reduced yields on orchards over a wide area.
Hail in January affected 15-20 orchards near Tauranga. On most orchards the damage was mainly shredded leaves rather than severe fruit marking.
Leaf condition in Hayward orchards at the end of the season was poor on some orchards. Leaves were small and, in some cases, distorted and sun bleached with dead portions similar to leaves with a nutrient deficiency. Fortunately this did not lead to widespread waterstain on fruit due to dry weather over the autumn. Growers affected attribute the poor leaf condition to seasonal vagaries. It is likely the dry autumn, previous high crop and poor conditions last autumn (2001) all contributed to this problem.
Girdling of vines to enhance fruit size was widespread in the district. Many growers saw a significant response to girdling, although fruit size was still smaller than they expected. Dry autumn conditions may have contributed to the smaller fruit size.
Growers were disappointed with fruit size of the gold variety. Use of a fruit size enhancer has been widespread in recent years. Growers consider it did not work well this season. Vines were left carrying high fruit numbers because growers were expecting a better response to the treatment than actually occurred, so fruit size was adversely affected. This resulted in very high reject rates because of undersized fruit, which reduced marketable yields. Reject fruit of both varieties is mainly undersized and unsuitable for marketing as Class I or Class II.
There were few pest problems this season. Both the wet spring and the dry autumn probably contributed to this.
The 2002 harvest started early in the Bay of Plenty due to early fruit maturity. In addition, dry weather conditions allowed picking almost every day for a month. This was in marked contrast to the 2001 harvest when late maturity and frequent rain disrupted picking.
At the time this report was written, harvest was incomplete. District-wide, yields are generally lower than last year and fruit size smaller, although there are orchards bucking the trend. Generally, those orchards that had very high yields last season have had the largest drop this season. This could be a biennial bearing trend accentuated by the poor growing conditions last autumn and this spring.
The model orchard yield for the 2002 harvest is 5,800 trays/ha of the green variety and 6,000 trays/ha of the gold variety. This is 18% and 24% respectively below the 2001 yields. This is an unusually high change in marketable yield between years, but the yield from the 2001 crop was one of the better results in recent years.
Gisborne
Gisborne has experienced a less than ideal growing season. A damp spring led to some production losses from the diseases bud rot and sclerotinia. This is the first time that bud rot has caused problems in the district.
A dry, late summer and autumn has led to generally smaller sized fruit and reduced production. As a result, the total crop of green kiwifruit is expected to be around 1.3 million trays, about 10% below normal production. The gold production season, however, was good with 250,000 trays produced from the 60 ha in production. The area planted in kiwifruit is relatively stable at around 230 ha. Of this about 40% is the gold variety.
Some 350,000 trays were picked and exported before 1 April under the “KiwiStart” early harvest programme. The district continues to be free of Fuller’s rose weevil, which has caused quarantine problems in Japan for fruit from other production regions.
Gisborne growers feel that they are not being adequately rewarded for the special characteristics that the region offers the industry (i.e., early maturing fruit and freedom from Fuller’s rose weevil). However, they realise that Gisborne is a very small production region.
Hawke’s Bay
A good growing season occurred, with no damaging hail or frosts. The 2002 kiwifruit yield is about 20% higher than the previous year in Hawke’s Bay when growing conditions were poor.
Fruit size is good and reject rates are modest. Few growers carried out girdling. Some flower thinning was carried out to adjust fruit numbers.
Both green and gold kiwifruit are grown in the region. The gold variety routinely requires frost protection due to the early bud-break as there is generally a high frost risk in the district.
Lower North Island
The growing season in Wanganui and Horowhenua was dominated by hail in spring and a cool, wet summer. Irrigation was not used this year due to the rain. As a result, yields are below average at around 5,000 trays/ha and fruit size is smaller than usual.
Nelson
Nelson has experienced a relatively favourable growing season. Good winter chilling, followed by high early season rainfall and average temperatures ensured good fruit size and moderate yields.
After a very dry winter the rain finally arrived in time for flowering, which affected pollination on many later-flowering blocks, and caused some flower losses from wet weather diseases. This reduced yields and caused some misshapen fruit on some blocks.
However, the above average rainfall from October to January ensured excellent early fruit growth. For the Waimea Plains, 793 mm of rain fell from October to April, and 632 mm from October to January. This is nearly three times last season’s 271 mm, and 50% above the long-term average for October to April.
Growing degree days (GDD) were higher than usual, especially in the early months of the growing season. For October to January, GDDs were 8% above the long-term average of 655.
Despite cooler temperatures in peak summer, the early rainfall and high GDDs led to very good fruit size. At the time of writing, all fruit was not packed, but fruit size was currently tracking at 33.6 fruit/tray compared with 35.9 last year. Packouts were excellent, with the main defect being misshapen fruit. This was associated with the poor pollination caused by rainfall over the flowering period. The total crop from the region will be slightly up on last year, which was affected by frost.
The use of girdling and summer pruning is increasing on Nelson orchards as growers strive to produce larger fruit with improved dry matter. Labour availability was not an issue this season as staff moved from apples to kiwifruit.
Kiwifruit orchards in Nelson are very stable with only a small amount of replacement planting taking place. Only small amounts of ZESPRITM GOLD have been planted due to the variety’s greater frost risk.
Financial Factors
2001/02 Review
Revenue
Gross orchard revenue for the model orchard was just over $232,500. This was $32,540 (16%) higher than in 2000/01. Both higher revenue per tray (up 9%) and higher production contributed. Yield of the green variety was up 4% to 7,100 trays/ha despite the difficult growing season to produce the 2001 crop. Yield of the gold variety on the model orchard was up 70% to 7,900 trays/ha due to the gold vines maturing.
For the 2001 crop, growers expect a total revenue of $5.95/tray for green and $6.87 for the gold variety of which 27 c/tray and 20 c/tray respectively will occur in the 2002/03 financial year. The full-season revenue per tray for green is 37 c/tray (7%) higher than in 2000/01 and for gold is 69 c/tray (9%) less.
Expenditure
The model orchard cash orchard expenditure was over $144,000, 13% higher than in 2000/01. Increased spending was required on harvesting and packing due to the higher yields achieved. General wages spending increased by 26% to $7,300/ha. This was the result of higher prices for contract labour, and the cost of additional work such as more fruit thinning and extensive girdling. Girdling was initially researched as a tool of most use in organic orchards to increase fruit size, but has been widely adopted by growers of both green and gold fruit.
Smaller increases occurred in vehicle costs (up 5%) and repairs and maintenance (up 11%). Fuel price rises were the main cause of increased vehicle costs. Repairs and maintenance continued to include attention to vine support structures. Many are nearing the end of their expected useful life at around 15-20 years old. In addition, higher yields have caused strain on timber structures. A number of growers are progressively replacing timber pergolas with steel beams through their orchards.
Net Result
The cash orchard surplus was $78,500. This was 28% higher than in the 2000/01 year, due mainly to the higher revenue.
The model’s interest costs are based on a table mortgage. However, many growers now have a credit-line type of borrowing facility rather than a separate table mortgage and overdraft. Debt continues to be very variable between growers, with about 30% estimated to have no term debt and others with moderate borrowings. As profitability has increased, growers have changed their focus from reducing debt to being happy with a modest debt (comparable to what an urban resident may have as a house mortgage).
Taxation due for the year is estimated at $6,300. Most growers pay provisional tax. Tax payments have increased in recent years as profit has increased. In a down year, tax payments will affect cashflow if based on the previous higher profit year.
The model orchard’s drawings were $45,000 for the year, which is similar to the 2000/01 level, reflecting another good year. Many growers consider they have a good lifestyle. Rather than making further big increases in personal spending, they are providing themselves with more time through less off-orchard work and more use of paid labour.
Development continued at a modest level of $4,200. Removal of shelter trees, and improving structures, tracks and drains are typical development activities. Many orchards, initially set up as a T-bar vine support structure, are converting to a pergola structure with the aim of achieving higher yields and more consistent fruit quality from the pergola structure.
Capital spending of $5,110 was estimated for the model. Some growers have purchased vehicles, improved their dwellings or made instalment payments for ZESPRI International Limited (ZESPRI) shares. Capital spending varies hugely between orchards.
Off-orchard income contributed $22,100 to the financial outcome. This increased by $8,700 (65%) over the previous year, and was more than growers expected at the beginning of the year. The increase was mainly investment income rather than wages or salaries. Many growers have investments in post-harvest facilities through a shareholding, which pays a dividend, as well as other investments outside the kiwifruit industry. There has been a trend towards restructuring share capital of kiwifruit post-harvest facilities away from a co-operative structure, to encourage investment in the post-harvest business in its own right.
2002/03 Forecast
Revenue
Forecast gross orchard revenue for the model for 2002/03 is $191,500. This is $41,000 less than 2001/02, mainly due to lower production, particularly of green fruit. Growers expect similar revenue per tray to their 2002 crop. A total of $6/tray for green and $7/tray for gold are forecast, with a further fall of 30 c/tray and 25 c/tray respectively for the 2003/04 financial year.
Final payments on the 2001 kiwifruit crop and repayment of an earlier promissory note are expected to contribute $12,600 to orchard revenue. Green Class II fruit is expected to contribute $3,500 to revenue. Class II volumes will be lower but price is expected to increase. For gold kiwifruit, Class II returns are not expected to produce grower revenue. Other fruit is expected to return $3,500, slightly less than in 2001/02. The most common other crop grown in the Bay of Plenty is the avocado, which appears likely to have lower yields during 2002/03.
Expenditure
Forecast orchard working expenses are $134,000. This is $10,400 (7%) less than in 2001/02, due mainly to the lower expected yield, which reduces yield-related harvest costs. Packing costs are likely to increase 4%/tray, but the lower production reduces the total orchard cost to less than in 2001/02.
In general, growers anticipate steady spending for the year on key items like wages, fertiliser, pest control and vehicle costs. Insurance premiums are expected to increase slightly in line with general trends for insurance. Repairs and maintenance are budgeted to fall $1,400 (15%), as maintenance projects reach completion, and reflecting limited contingency budgeting for repairs.
Grower spending in 2002/03 will produce their 2003 crop, but income is determined on the mostly-harvested 2002 crop. Despite the lower 2002 yield, growers do not intend to cut spending as they do not want to jeopardise the quality or production level of their 2003 crop.
Net Result
The model budget is forecast to provide a cash orchard surplus of $48,000. This is over $30,000 (39%) less than 2001/02, due mainly to the lower yield in 2002.
Taxation payments for the model are estimated at $10,300. This estimate assumes that growers will make arrangements to have their provisional tax reassessed in the light of the reduced income expected for the year.
Drawings at $48,000 are forecast to be a little higher than in 2001/02.
Growers expect to spend slightly less on development and capital items. Development activities tend to be winter activities. However, growers’ capital spending decisions are often made late in the financial year when their forecast financial position is more certain. Actual capital spending can therefore differ markedly from intentions at the time these forecasts are prepared.
Off-orchard income is expected to contribute $19,700 from a mix of off-orchard work and various investments within and outside the kiwifruit industry.
The model orchard is forecast to make a disposable loss of over $21,000. This is almost completely covered by off-orchard income of nearly $20,000. Growers are likely to adjust their drawings and other discretionary expenditure as the season progresses and the financial situation becomes clearer.
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Bay of Plenty Kiwifruit |
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2001/02 |
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2002/03f |
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$ |
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$ |
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Whole orchard |
per ha |
per |
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Whole orchard |
per ha |
per |
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Class 1 |
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Class 1 |
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tray |
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|
tray |
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Revenue |
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Green - export progress |
181,476 |
40,328 |
5.68 |
|
148,770 |
33,060 |
5.70 |
|
- Final from last year |
13,999 |
3,111 |
0.44 |
|
11,820 |
2,627 |
0.45 |
|
- Local/class II |
3,095 |
688 |
0.10 |
|
3,500 |
778 |
0.13 |
|
Gold - export progress |
26,347 |
52,694 |
6.67 |
|
20,250 |
40,500 |
6.75 |
|
- Final from last year |
851 |
1,702 |
0.22 |
|
790 |
1,580 |
0.26 |
|
- Local/class II |
0 |
0 |
0.00 |
|
0 |
0 |
0.00 |
|
Other fruit crops |
3,900 |
780 |
0.11 |
|
3,500 |
700 |
0.12 |
|
Rebates/hire |
2,900 |
580 |
0.08 |
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2,850 |
570 |
0.10 |
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Gross Orchard Revenue |
232,568 |
46,514 |
6.48 |
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191,480 |
38,296 |
6.58 |
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Cash Orchard Expenditure |
144,363 |
28,873 |
4.02 |
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134,003 |
26,801 |
4.60 |
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Interest |
9,700 |
1,940 |
0.27 |
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9,400 |
1,880 |
0.32 |
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Rent &/or leases |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Cash Orchard Surplus |
78,505 |
15,701 |
2.19 |
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48,077 |
9,615 |
1.65 |
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Stock on hand adjustment |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Depreciation |
8,500 |
1,700 |
0.24 |
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8,000 |
1,600 |
0.27 |
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Net Trading Profit |
70,005 |
14,001 |
1.95 |
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40,077 |
8,015 |
1.38 |
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Taxation |
6,311 |
1,262 |
0.18 |
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10,312 |
2,062 |
0.35 |
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Net Trading Profit after Tax |
63,694 |
12,739 |
1.77 |
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29,765 |
5,953 |
1.02 |
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Allocation of Funds |
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add back Depreciation |
8,500 |
1,700 |
0.24 |
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8,000 |
1,600 |
0.27 |
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add back Stock value adjustment |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Drawings |
45,000 |
9,000 |
1.25 |
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48,000 |
9,600 |
1.65 |
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Principal repayments |
5,000 |
1,000 |
0.14 |
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5,300 |
1,060 |
0.18 |
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Development |
4,200 |
840 |
0.12 |
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3,700 |
740 |
0.13 |
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Capital purchases |
5,110 |
1,022 |
0.14 |
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2,400 |
480 |
0.08 |
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Disposable Surplus/Deficit |
12,884 |
2,577 |
0.36 |
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-21,635 |
-4,327 |
-0.74 |
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Other Cash Sources |
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New borrowing |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Off-orchard income |
22,100 |
4,420 |
0.62 |
|
19,700 |
3,940 |
0.68 |
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Other cash income |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Net Cash Change |
34,984 |
6,997 |
0.97 |
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-1,935 |
-387 |
-0.07 |
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Assets and Liabilities |
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Land and building (Opening) |
1,000,000 |
200,000 |
27.86 |
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1,250,000 |
250,000 |
42.96 |
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Plant and machinery (Opening) |
52,500 |
10,500 |
1.46 |
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48,400 |
9,680 |
1.66 |
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Stock valuation (Opening) |
0 |
0 |
0.00 |
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0 |
0 |
0.00 |
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Total Orchard Capital |
1,052,500 |
210,500 |
29.32 |
|
1,298,400 |
259,680 |
44.62 |
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Total Debt Opening |
122,000 |
24,400 |
3.40 |
|
120,000 |
24,000 |
4.12 |
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Equity (Farm Assets-Liabilities) |
930,500 |
#### |
25.92 |
|
###### |
#### |
40.49 |
Issues and Trends
Many kiwifruit growers are feeling positive about their current position. Their orchards are profitable and able to support a good level of drawings and reinvestment. Debt levels are comfortable. However, the reduced 2002 yield is dampening confidence. Looking ahead, growers see challenges for the New Zealand kiwifruit industry. On-shore issues include balancing the demands of different products and grower groups. Other key issues that growers feel are likely to reduce future profitability are rising New Zealand production and the rising value of the New Zealand dollar. Growers see limited room for increased productivity or cost reductions in any future downturn.
Financial performance of individual growers continues to vary enormously. Variations are driven by factors like product mix, site, seasonal conditions, technology, management and post-harvest management. Differences in yield, fruit size and fruit quality have a marked effect on returns to individual growers.
Green kiwifruit comprises about 85% of total industry revenue, gold about 11% and organic green fruit about 4%. As the product base diversifies, issues of fairness between the product pools have become more significant and controversial. Many gold growers also have green kiwifruit, but there are a number of large-scale gold-only orchards coming into production, and gold will become a larger proportion of industry production and revenue in the future. Organic gold fruit receives a market-based revenue premium but volumes so far are modest.
Recently a Green Growers’ Association has been established to represent the specific views of green kiwifruit growers. An organic growers’ group and a gold growers’ group already exist. Originally the industry produced only green kiwifruit, but in recent years organic and gold fruit have taken on greater prominence, which has given rise to specific sector groups. There was a feeling by some green kiwifruit growers that their views were not being heard because they lacked their own group.
The overarching organisation is New Zealand Kiwifruit Growers Inc (KGI), the national organisation representing New Zealand kiwifruit growers. KGI is made up of district representatives and has progressively incorporated specific sector interests by inviting co-opted members onto the KGI forum. However, with the evolution of the industry and the development of sector groups, KGI is undertaking a review of its representative structure, which may see a move towards more formal sector representation.
Production of organic kiwifruit is static or declining. Some organic orchards are on the fringe of urban areas and have been subdivided for housing. Declining premiums over non-organic fruit have reduced orchard profitability. Few growers are considering making the three-year transition to organic certification and some organic growers are reverting to non-organic growing methods.
Revenue premiums for organic fruit have declined from $2-$3/tray to under $1.50/tray, which is insufficient to offset the typically lower yield. The decline in revenue is mainly related to fumigation in Japan, causing loss of organic status. Japan is a significant market for organic fruit at premium prices. Fumigation affects at least a whole storage chamber of a boat, even though only a limited number of fruit lines may fail pest specifications and require fumigation. If fumigated, fruit can no longer be sold as organic. This increases costs and disrupts marketing programmes due to uncertain supply of organic fruit to customers, as well as loss of organic price premiums where the fruit cannot be marketed as organic.
Concerned that more growers would switch away from organic growing, ZESPRI worked with organic growers to develop a payment basis for organic fruit aimed at keeping growers in organic production. It was proposed that the differential payment be sourced from the green revenue pool. Green growers were concerned at the size of the payment and the lack of consultation in reaching the decision. A KGI review group investigated the proposal and recommended some changes which were adopted. ZESPRI also discussed the reasons behind the payment at scheduled grower road shows. When they received a fuller explanation and were able to put questions, most growers attending these meetings then supported the revised proposal. ZESPRI always intended the payment to organic growers to be a temporary arrangement. Their essential requirement is to supply organic fruit to major customers. ZESPRI’s ability to supply the broad product range including organic fruit is a key competitive advantage.
The New Zealand kiwifruit industry has been developing an industry plan to guide future development. A consultative process considered key issues such as supply relationships, payment systems and product pools. The process included a workbook, seminar and discussions during many small group meetings hosted by ZESPRI, but independently chaired. A key outcome so far has been support for the progressive refinement of industry processes rather than wholesale change (“evolution not revolution”). Performance benchmarking of both ZESPRI and supplier returns was seen as a key need by growers. A working group has been formed to review the product pool-based payment system over the next 12 months.
The price and volume figures used in this report are derived from growers’ actual and expected figures at the time of compilation in May 2002. They differ from both the ZESPRI prices (which are often quoted inclusive of service payments of around $1/tray), and ZESPRI volumes (which are usually quoted as the number of trays loaded onto ships). The latter is less than growers pack. The different level of average service payments and different levels of fruit losses for green, gold and organic fruit also distort direct comparison of revenue for the different fruit types. Table 3 summarises the ZESPRI estimated prices for the 2001 crop, along with average fruit size.
The basis for individual grower payments has become increasingly complex. Growers are paid through supply entities, which are groups of post-harvest facilities that contract to provide services such as coolstorage and loading onto ships. Growers receive payments from supply entities net of costs for services like coolstorage and packing. The system allows for considerable variation in grower payment per tray, and in timing of payments between supply entities.
Growers are even more confused about details of the revenue they receive compared with ZESPRI forecasts. The variation in the way figures are presented makes comparison with historical revenue, other supply groups and ZESPRI forecasts all difficult. In response to grower feedback, ZESPRI is now presenting an estimated orchard gate return (OGR) per tray and per hectare. This is evolving with wide industry input, and may become a recognised industry benchmark. Growers are asking for more robust independent performance benchmarks and have flagged this as something for KGI to address.
The taste of fruit from the 2001 harvest was disappointing. This was widespread and mainly caused by seasonal conditions. Some fruit that was likely to taste better was identified, and growers rewarded with a premium payment. The 2002 harvested fruit is likely to taste better due to conditions favouring the development of taste. In addition, ZESPRI has expanded the programme to identify better tasting fruit, and have run a series of grower field days on growing methods to improve fruit taste and reduce variability.
The start of the marketing season for the 2002 crop is excellent. Fruit is in the markets early and large volumes are moving at good prices due to low market stocks. The early fruit maturity and good harvesting weather are in contrast to the previous year and have meant ZESPRI can supply a receptive market. Growers are not relying on this feeding through to higher grower revenues because of the lower yield and the increasing value of the New Zealand dollar. Also, with industry volume below estimates, growers are conscious that the cost of pre-planned marketing activities will increase costs per tray and detract from revenue.
Ability to accurately forecast production remains a key issue at all levels of the industry. As well as trays produced in each fruit class, the size profile is important in marketing plans. Class II green fruit will be in short supply during 2002.
Illegal export of New Zealand kiwifruit to overseas markets has been an issue for a number of years as it breaches New Zealand regulations, and depresses returns to the New Zealand growers’ pools. ZESPRI gathered specific information this year on one breach, and this was passed onto the New Zealand Ministry of Agriculture and Forestry for legal action.
Developing methods to get the best results from the new gold variety is still a challenge. Fruit maturity and storage conditions are key linked issues. A high level of fruit losses from the 2002 crop had a significant effect on returns due to both the specific costs of handling inferior fruit and the reduced volume to sell, increasing costs per tray. Growers were disappointed at the modest premium over returns for green kiwifruit. A significant amount of research into key fruit storage issues is underway and recommendations for maturity and fruit storage have been revised. The fruit is now being stored at warmer temperatures than green kiwifruit so needs to be coolstored separately. A number of post-harvest facilities already handle the gold variety in separate packhouses and coolstores, so the logistical changes are readily made.
The quarantine pest Fuller’s rose weevil has been an issue as it is difficult to meet Japanese quarantine standards with the industry emphasis on modest chemical use and low residues. The weevil does not affect vine productivity. The weevil walks up into the vine and lays eggs on the kiwifruit. Many growers this season have used a sticky gel, spread around posts and vine trunks, as a physical barrier to the pest. ZESPRI is paying an incentive for fruit that reaches Japanese quarantine standards.
The number of post-harvest providers has continued to decline, with one major Bay of Plenty merger and one purchase. Facility providers are encouraging growers to invest in the business, and several have revised their shareholding structure to separate investment returns from throughput rebates. Post-harvest services in North Island regions are dominated by Bay of Plenty-based companies. Fruit is often trucked to the Bay of Plenty for packing, or packed in the local region by a Bay of Plenty-owned post-harvest group. All Hawke’s Bay fruit is packed in the Bay of Plenty. Gisborne, Auckland and Northland have significant quantities of their fruit handled by Bay of Plenty-based companies. Independent packhouses/coolstores in other regions are usually part of a supply group with a Bay of Plenty-based company.
Labour supply for the 2002 harvest was adequate. The early fruit maturity and a good run of weather through the first six weeks helped, as work was available continuously. Publicity in the Bay of Plenty media about seasonal work and the New Zealand Fruitgrowers Federation brochure aimed at backpackers have helped raise the profile of seasonal kiwifruit work. Several training initiatives are underway which are being taken up within the kiwifruit industry. A revamped cadetship scheme and regional tutoring of a university horticulture diploma are available in the Bay of Plenty. Nationally, the New Zealand Fruitgrowers Federation has begun a new leadership development programme, which is intended to lead onto other established rural leadership programmes.
ZESPRI is relocating its head office from Auckland to the Bay of Plenty, to combine with the existing office at Mount Maunganui. The process has required some staff changes and transitional arrangements, like temporary office buildings. It is intended to improve efficiency and effectiveness by having one site for all staff and major functions.
Prices for kiwifruit orchards are still very high, and sales are readily made. Orchards have sold for $200,000/ha plus buildings. Some growers are concerned that values are at a peak, and are considering whether they should sell and realise their capital gain. However, their commitment to the orchard and the kiwifruit industry, and the fact that the orchard is usually also their home, means few sell up unless they have other specific plans.
Wind machines for frost protection have been controversial in the Bay of Plenty. More growers have been keen to install them after frost damage in successive springs. Neighbours worried about noise has meant that notified resource consents have been necessary. Growers are frustrated with delays, costs and uncertainty given the fans are typically used less than 10 nights a year, and the importance of kiwifruit within the Bay of Plenty economy. Of the first few notified consents, one was granted with workable conditions and another was declined. One consent has been appealed to the Environment Court.
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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