Financial Factors
Revenue
Export Returns
National data was unavailable for the 2002/03 export crop value at the time this report was prepared. Although volume was down, the high value cherry component of the export summerfruit crop increased by almost 42%. The prices paid were up by 30% which, together with the better apricot prices this season, should see the total export summerfruit free on board (FOB) value similar to the average for the last three seasons.
Cherries sold well with larger sizes, 28 to 32, returning over $12/kg to the grower. Export cherries averaged $11.25/kg, which is a 30% increase on last year.
Excellent quality and extended shelf life of apricots produced returns of $3.50-$6.00/kg. Prices stayed stable to the end of the season with constant consumer demand.
Very few lines of nectarines and peaches were exported as local demand outstripped supply with satisfactory returns.
Local Market Returns
Local market prices were consistently above last season by 50-100%, giving the best returns seen for summerfruit for many years. For those growers who managed to save a substantial portion of their crops, 2002/03 has been a very good year. One Hawke's Bay example, which would be typical of many growers, harvested 27% less volume of nectarines this year than last year, and received over 100% more orchard gate return for this smaller 2002/03 crop.
Otago gross revenue from both the export and local markets was a major improvement on the 2002 season and above average. Excellent consistent quality, above average sizes and steady demand kept the markets buoyant for the entire season. The only unfortunate situation that occurred was the plight of a significant number of growers who were unable to provide adequate frost protection for their fruit.
Cherries
Early season wholesale prices were $9.00-$11.00/kg, compared with $5.00-$6.00/kg last season. Main season and late season varieties were in the $5.00-$7.50/kg range, which enabled growers concentrating on local market supply to receive similar returns to export.
Early season apricots received $3.00-$4.00/kg or better, while main crop apricots never dropped below $2.50/kg and averaged $3.00/kg, with no signs of oversupply at any time during the season.
Early and mid-season peach and nectarine supplies, mainly from Hawke's Bay, ranged from $3.00-$4.50/kg. Early season nectarine prices were similar to last season, but prices strengthened once buyers recognised the short supply situation. Later season Central Otago production also met with good demand, with prices in the $2.50-$3.20/kg range.
Premium variety plums, such as Fortune, Purple King, Santa Rosa, Freedom and other newer, high quality varieties, returned $4.00-$5.00/kg. Commodity varieties, such as Black Doris and Billington, were in the $2.00-$3.00/kg range. Later season, good quality plums from Central Otago returned an average of $4.00/kg.
Processing Returns
Heinz, the largest summerfruit processor based in Hawke's Bay, paid similar prices to recent seasons, with $500/tonne for peaches and $1,000/tonne for Black Doris plums. Premiums paid for larger fruit size would have given a marginal price lift for peaches, which had larger fruit size than a normal season. However, only growers with a near full crop would have benefited this year as overall process peach intake was down by 80%. Some process growers diverted crop to the local fresh market for better returns. Many suppliers recognised that the long-term future of their industry relied on a viable processing industry, so continued to supply process fruit.
The better Black Doris crop this year would have given process plum growers increased returns.
In Otago, the process apricot prices declined further to $0.74/kg, making process apricot production uneconomic.
Table 4: New Zealand Average Wholesale Summerfruit Returns ($/kg)
Fruit Type |
1999/2000 |
2000/01 |
2001/02 |
2002/03 |
Nectarines |
1.30 |
2.80 |
1.80 |
3.55 |
Peaches |
1.80 |
2.80 |
1.70 |
3.55 |
Apricots |
2.00 |
3.00 |
2.20 |
3.35 |
Cherries |
4.50 |
6.00 |
4.50 |
7.50 |
Plums |
2.00 |
4.00 |
2.80 |
4.00 |
Source: AgFirst Consultants NZ Ltd
Expenditure
Hawke's Bay growers who rely heavily on wind machines, helicopters and supplementary orchard heating for frost protection are reported to have spent twice as much as in a normal season on frost protection. On the other hand, thinning and spraying costs were less than last season.
Relative to orchard gate revenue, packing, packaging and marketing expenses were proportionally lower because of lighter cropping resulting in high fruit returns and significantly better packouts. In Hawke's Bay, packing, packaging and fruit are estimated to be 60 c/kg with sales commission of 12%.
In Otago, on-orchard production costs were considerably reduced when compared with last year, or even an average year. The lack of any significant hand thinning was a major factor in cost reduction, while the increased fruit size dramatically cut harvest costs. The requirement for fungicides was also reduced as the continuous hot weather kept fungus infections to a minimum.
Net Result
Average nectarine prices last year would have given an orchard gate value just under $1.00/kg compared with about $2.50/kg this season. On this basis, growers who saved 40% or more of their crop this season would have enjoyed similar or better gross margins than last year. The individual grower situation was very dependant on the level of frost damage they suffered. Those with severe frost damage had little crop to harvest, so were worse off than last season, whereas those who were successful in their frost protection and saved above 50% of their crop, would have had a very successful year.
Returns for most Hawke's Bay process peach growers this season were inadequate to cover their orchard production costs.
Hawke's Bay apricot growers generally suffered very poor yields and had very low orchard revenue, even though fruit prices for apricots were historically high.
Otago growers on average fared better than those in Hawke's Bay this year because their orchards are geared up to fight frosts on a regular basis. With the exception of a small group of frost-affected growers, most Otago summerfruit growers enjoyed buoyant and most welcome increased returns for the entire season.
The high returns this season were due to weather-related factors reducing the crop to below normal demand levels. The return of a normal season next year, without weather-related crop reduction, could result in supply exceeding demand and returns being similar to the 2001/02 season.
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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