Financial Factors
Revenue
New Zealand represents 3-4% of the world's blueberry supply. The New Zealand frozen blueberry price is determined by the international commodity price for the product. Despite the fact that the volume of New Zealand frozen blueberries was insufficient to meet market programmes, the price reduced about 10 c/kg this season, reflecting exchange rate movements.
Fresh blueberry returns averaged $14.80/kg in 2002/03. The normal pattern for blueberries of high early season price, lower mid-season price, followed by high later season fresh grower returns was less pronounced in 2002/03. This was due to a number of factors. Blueberry growers in Chile, New Zealand's major Southern Hemisphere competitor, were also affected by frosts. Considerably lower Chilean crop was supplied and later in the season. This resulted in stronger than usual demand from Northern Hemisphere markets in January and February, with New Zealand product receiving better average mid-season prices than usual. The Chilean crop, which came in later, had the effect of reducing later season fresh blueberry prices to New Zealand growers.
Growers received prices for strawberries that were comparable to the 2000/01 season, although supplying fresh export fruit that is profitable remains a challenge. The high cost of air freight for fresh export strawberries, the high exchange rate against the United States dollar (USD) and competition from China in Asian markets, has made it difficult to hold the grower return at around $5.00/kg for export product.
Boysenberry returns per kilogram in 2002/03 were comparable to previous seasons. Grower returns were higher overall, due to higher crop yield and better yield recovery at harvest.
The major buyer of blackcurrants implemented a payment system based on quality for the 2002/03 season. While the changes had been signalled to growers for a number of years, this is the first year of implementation of the quality-based payment system. Grower revenue is likely to be significantly improved in 2002/03, because of higher harvested yields. For the proportion of blackcurrant crop not committed to firm sales for processing, payments will be staggered and later than normal.
Raspberry prices for 2002/03 have increased slightly (up about 2%), reflecting a small lift in the world price for frozen raspberry product. Like the other berryfruit crops where good yields have been achieved, this will enhance grower revenue significantly.
Expenditure
Growers report that costs remain steady. With the increase in youth labour rates, many berryfruit growers preferred to employ adults, to obtain better quality labour for harvest, grading and packing.
Berryfruit growers, particularly those in the South Island, report increasing difficulty in obtaining enough labour for winter pruning and training activities.
The blueberry industry implemented a major food safety programme for growers, but the cost of this was offset by rebates from grower industry levies.
Food safety, environmental safety and related quality assurance programmes are continuing to increase the cost of compliance to growers. A number of large-scale growers report an up to 10% increase in labour costs to meet compliance requirements.
Imported inputs, such as some items of packaging, did not appear to benefit growers from lower prices that would have been expected due to the high value of the New Zealand dollar against the USD.
For boysenberry, raspberry and blackcurrant growers, fixed costs have effectively been reduced per unit of production, due to better yields in the 2002/03 season.
For the machine harvest-based berryfruit industries, where economy of scale is becoming increasingly important to remain competitive, there is a gradual loss of smaller growers.
Grower awareness of diseases and disease management has improved significantly. This has resulted in more targeted and effective use of agrichemicals.
Net Result
Table 2 shows gross margins for export berryfruit crops. The gross margin represents gross revenue less the variable costs of production. It does not consider overhead costs, such as taxation, debt servicing and administration. Levies charged per unit of production or sales are included in the gross margin.
Table 2: Gross Margins
Crop |
Product |
2000/01 |
2001/02 |
2002/03 |
Change |
Strawberries |
Fresh |
18,256 |
16,105 |
17,949 |
+11 |
Blueberries |
Fresh |
34,406 |
26,518 |
29,672 |
+12 |
Blueberries |
Frozen |
5,479 |
5,369 |
5,515 |
+3 |
Boysenberries |
Frozen |
3,340 |
1,371 |
8,046 |
+487 |
Raspberries |
Frozen |
7,209 |
5,597 |
8,568 |
+53 |
Blackcurrants |
Frozen |
4,601 |
3,317 |
4,570 |
+38 |
Sources: NZ Berryfruit Growers' Federation Inc and Strawberry Growers New Zealand
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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