- Key points
- Climatic factors affecting production
- Production figures
- Financial position
- Issues and trends
4 Process and fresh vegetables
This commentary covers the production, profitability, trends and issues for process and fresh vegetable growers over the entire country, and covers produce grown for both local and export markets. The report is an amalgamation of the previous south Auckland/Waikato commercial vegetable, lower North Island process and fresh vegetable and Canterbury process and fresh vegetable reports.
The commentary covers the growing season from July 2005 to June 2006.
Key points
- The growing season was dry and warm in most parts of the country, causing few issues for growers who were able to irrigate crops.
- In Gisborne, two flood events led to the loss of 1300 hectares of vegetable crops.
- Input costs such as labour and imported items such as fuel, freight and fertilisers have escalated.
- Horticulture New Zealand, the growers’ national representative body, has become active in the New Zealand Fair Trading Coalition to support growers who feel at a competitive disadvantage when selling their produce.
- The decision not to introduce the proposed carbon tax has been welcomed by growers.
- The closure of the McCain Foods Fielding plant has left many specialised growers in the area with few crop options, but will increase the growing area in South Canterbury.
Climatic factors affecting production
In Pukekohe, an extremely dry summer followed a dry winter. Rainfall in the 12 months to March was 970 millimetres, 25 percent less than average. Apart from May and October, monthly rainfall was always less than average. November was particularly dry with just 36 millimetres (36 percent of the average) falling when crops were sizing (the most critical time for crop yield). While December rainfall was average, most of this did not arrive until near the end of the month. Irrigation was essential for Pukekohe growers this summer, with half the average rainfall between January and March and just six millimetres in February.
For Gisborne growers, the 2005/06 growing season will be remembered as the most difficult season since Cyclone Bola struck in 1988. Two major rainfall events, one at Labour Weekend and another five weeks later, washed away crops close to rivers and caused ponding damage. Some growers replanted crops after the first flood only to have them damaged again by the second event. It is estimated that almost 1300 hectares were affected by this flood damage.
In general, Hawkes Bay growers had an excellent growing season. Although temperatures in October and November were cooler than normal, summer temperatures were at or above average. The cooler temperatures meant crops were slower to establish, but a warm summer with little rain and adequate irrigation resulted in crops generally maturing and yielding well.
In Canterbury, monthly rainfall in 2005/06 was well below the long-term average for all months except March. Total rainfall for the year was only 432 millimetres or 70 percent of the long-term average. The winter was particularly dry with only 47 millimetres falling between June and August compared with the long-term average of 185 millimetres.
Air temperatures in Canterbury were warmer than normal from July to September by 1.6 to 1.7 degrees Celsius. They then dropped below the long-term average for the month of October, but became warmer again in December and January (by 1.7 and 1.2 degrees Celsius respectively). March was a cool month at 2.1 degrees Celsius below average. The warm dry conditions during the 2005 winter allowed soils to be cultivated with a minimum of passes, and reduced costs for growers sowing early vegetable crops. Fewer northwest winds and days with extreme temperatures during the summer meant Canterbury growers had sufficient water for irrigation. Most of the crops considered in this report are grown in the lower plains, and apart from some shallow wells, aquifers still produced sufficient water to meet demand. Growers preferentially irrigate their vegetable crops when water supply is restricted.
Growing conditions were reasonable for covered crops (tomatoes, capsicums, cucumbers), with high winter light and good spring conditions. Higher summer night temperatures and overcast skies in December made for difficult growing conditions and caused flushes (periods of high growth and rapid maturing), resulting in oversupply at times. The lack of consistent warm conditions also reduced the demand for summer salads.
Figures 4.1 and 4.2 provide comparisons of this year’s weather records for rainfall and temperature with long term averages.
Production figures
Potatoes
There were an estimated 11 300 hectares of potatoes planted throughout New Zealand in the year ending December 2005, down 4 percent from the previous season. This area was planted by 279 growers, six less than in the 2004/05 growing season.
In Pukekohe, early potato yields were considered poor to average. The dry August contributed to these light yields. Main crop potatoes had reasonable yields as long as growers were able to irrigate. However, without irrigation the number of potatoes and the tuber size were both small. In Canterbury, low climatic stress on the crops during the growing season and little disease pressure caused early crops of process potatoes to yield well. Later season crops are also expected to yield well. Potato seed producers also had a better growing season than last year.
Average yields for potato growers were similar to last season with typical North Island yields of 45 tonnes per hectare and 65 tonnes per hectare in Canterbury. The yield is typically higher in Canterbury as growers are focusing on process rather than fresh potatoes.
The volume of fresh and processed potatoes exported from New Zealand in the year ended March 2006 (including seed potatoes) was 90 862 tonnes. The value of these exports totalled $70.5 million.
Figure 4.1: Rainfall for the process and fresh vegetables growing season
Source
NIWA
Onions
The area planted in onions was estimated at 4300 hectares for the year ended December 2005. This was 14 percent down from the previous year, due to poor returns over recent seasons. The majority of this area reduction occurred in Pukekohe where 430 fewer hectares were planted. The reduction was less than originally anticipated, partly because of ideal planting conditions in August.
Figure 4.2: Mean monthly temperatures for the process and fresh vegetables growing season
Source
NIWA
The weather conditions for onion production and harvesting have been the best experienced in many years. Onion yields were average, although some growers reported lighter yields. The resulting high quality of export onions was desperately needed to salvage the reputation of New Zealand product in Europe and the United Kingdom following several years of poor quality. The growing conditions experienced by Hawkes Bay growers resulted in good bulb size and shape. Fewer days of hot drying winds in Canterbury resulted in less leaf damage and higher quality onions.
High thrip numbers on onion crops did not result in post-harvest problems, because of better skin condition. Growers continue to struggle with the control of onion thrip, as the agrichemicals available to them do not fully control the pest. There was more pink root (caused by the fungus Phoma terrestris) than normal due to the dry periods that caused plant stress, allowing the fungus to enter and affect yields.
Yields of onions in the North Island dropped an average of 12 percent to around 35 tonne per hectare. However, the percentage of exportable yield was higher at around 90 percent compared with the previous year’s average of around 80 percent. The net result of this was similar yields of exportable product.
The volume of onions exported from New Zealand to the year ended March 2006 was 156 000 tonnes, with a total free on board (FOB) value of $69.6 million. This is similar to last year, but substantially less than some earlier years, when the value of onion exports exceeded $100 million at times.
Squash
The total planted area of squash in New Zealand in the 2005/06 season was estimated to be 6300 hectares, 22 percent less than the previous season.
In the Pukekohe region, those who could irrigate over summer achieved good yields. However, it was another disappointing year for Gisborne squash growers. An estimated 690 hectares of squash (of the 2200 hectares planted over the season in Gisborne) were affected by flooding, and some fields were flooded again after being resown. Crops that survived were affected by strong winds, which opened the leaf canopy up and allowed diseases such as powdery mildew and angular leaf spot to establish. Growers had to apply more fungicides than usual. Average yields were around eight tonnes per hectare, compared with the normal 13 tonnes per hectare.
In the Hawkes Bay, squash growers had a good season. Yields averaged 13 tonne per hectare (two to three tonnes per hectare up on last year) with some crops over 20 tonnes per hectare. Powdery mildew levels were down due to the cooler weather, although packers reported more rot this year due to denser canopies and fruit that had grown more rapidly.
Some in the industry are concerned that there could be an upsurge in plantings next season after the good 2005/06 production season in the main growing area, Hawkes Bay.
For the year ended March 2006, a total of 89 016 tonnes of squash were exported from New Zealand with a FOB value of $59 million. This is an 8 percent reduction on the value achieved in the previous season from only a 2 percent reduction in volume.
Greens
The production of all green vegetable crops in Pukekohe relied on the ability to irrigate over the summer.
The seasonal conditions meant that lettuce quality has been very good with no significant disease issues. A breakthrough in controlling the destructive lettuce aphid has been achieved with the granting of a new label claim for the systemic insecticide Confidor®. Lettuce aphid was first detected in 2002 and has spread throughout New Zealand to become the biggest plant health issue facing lettuce growers.
A new disease threat to the New Zealand lettuce industry has been the detection in Western Australia of lettuce leaf blight caused by the fungus Pythium tracheiphilum Matta. As it has only appeared on two properties in Australia, there is hope that it can be eradicated. While it has not been found in New Zealand, it has the potential to cause up to 50 percent losses, particularly on poor-draining soils in cool wet weather. The climate in New Zealand is potentially ideal for this disease, especially in Auckland.
Future trends will include the continued growth of bagged iceberg lettuce and mesclun mix with its attractive colours and textures. This is reducing the dominance of loose iceberg, although this still sells well in traditional greengrocer outlets.
Growers observe that significantly more cauliflower was planted this year following the good prices last year. Quality was poor through most of the country in May due to warm conditions and high sunshine hours. This causes rapid growth, which in turn causes hollow stem and opens up the curd, which should be tight and even.
While overall it was a good production year for crops such as broccoli and cauliflower, there were periods when weather conditions caused significant oversupply. These were followed by periods when the market could not be supplied.
The quality of produce has improved throughout the industry. This has been driven by a combination of fewer, more professional growers and the recently introduced more stringent quality requirements for growers supplying Progressive Enterprises. Growers are also tending to become more specialised and growing larger areas of fewer crops.
Asparagus
Asparagus plantings have declined 50 percent over the past five years, to the current estimated area of 810 hectares. The two main factors driving the drop are the poor returns growers are receiving relative to the capital cost of planting a new production bed, and the value of land surrounding large urban areas for either lifestyle or residential subdivisions. Some of the area removed from production included high-value clonal material planted two to three years ago in the Waikato, which did not perform as expected.
The seasonal conditions for asparagus growers were generally good. In Canterbury, asparagus harvesting started two to three weeks earlier than usual due to the warm dry spring, but carried on to normal finish dates due to the temperate conditions. Yields were about average.
Growers had an average season in the Hawkes Bay and Manawatu, where asparagus is produced mainly for the process market. The cooler spring caused spear development to be slow. The crop from the first cuts was also light, with improved yields from later cuts. The dry winter meant that Phytophthora, a fungal infection of the below-ground parts of the plant, was less problematic than in previous seasons.
Growers in the Waikato experienced a relatively good growing season. The average yield for growers in the Waikato is estimated to have been 20 percent higher this year at approximately six tonne per hectare.
Inability to get labour at key times, resulting in wastage of crop, was the most significant impact on asparagus production. Cutting the spears within a day of it being ready to harvest is critical to ensure high quality product. One grower commented that he lost approximately 20 percent of an estimated eight tonne per hectare crop because of a lack of staff to harvest the spears. Producers on older, poorer yielding blocks were forced to close up early as the pay rates demanded by staff made it uneconomic to harvest their asparagus.
The removal of poor performing asparagus blocks has lifted the national average yield to 3.6 tonnes per hectare.
The value of asparagus exports for the year ended March 2006 was $5.3 million from a volume of 803 tonnes, which reflects the improved export prices. Despite the 12 percent drop in export volumes, value only decreased by 2 percent compared with the previous year.
Carrots
Carrot growers reported a variable season, with some growers crediting their good yields and high quality to their ability to access high quality land that had not previously grown carrots.
For the year ended March 2006, a total of 7459 tonnes of carrots were exported mainly to Japan and other Asian countries, with an FOB value of $5.1 million. This was 48 percent down on the volume exported in the previous season. The decrease was caused by the larger volumes of cheaper product being sourced from China, the strong exchange rate (although this has now fallen back in value), and several large operators pulling out of the industry, including one who moved to Western Australia to take advantage of cheaper shipping rates.
Process crops
The area of process peas contracted by McCain Foods in the lower North Island was down by 50 percent. The heavy rainfall in October reduced yields from the usual 6.5 tonnes per hectare to around five tonnes per hectare. Most crops are now established under a minimum tillage regime. This saves on production costs in a crop with comparatively low returns. In Canterbury, the season was ideal for process peas. There was less disease, better conditions at sowing, and temperate conditions. However, drier conditions in February reduced quality and yield in late crops.
Sweetcorn growers in Gisborne had a reasonable year, apart from the early season floods that caused the loss of 490 hectares of sweetcorn. Some growers were able to extend their planting season to late December to maintain their intended planted area. Average yields were excellent at approximately 21 tonnes per hectare. After the rain, infestations of rust and northern leaf blight occurred but these were generally in isolated areas. In Hawkes Bay, both processors (McCain Foods and Heinz Wattie’s), cut back on their contracted area. Crop scheduling problems also caused an estimated 400 hectares of sweetcorn to be bypassed (i.e. not harvested). Yields were excellent, but growers consider that bypass payments this year did not fully compensate them. For Canterbury growers, sweetcorn production was good in early sown crops, but late sown crops were disappointing due to cooler conditions.
Canterbury processors have commented that it was a good year for all process crops, including peas, bush or snap beans, and sweetcorn. Potatoes and carrots, which will be harvested in the early winter, are also likely to have good yields.
Tomato growers in Gisborne had a disappointing season compared to last year. Some early crops were flooded and not replanted. These flood-affected crops only produced 50 tonnes per hectare, half that achieved in the previous year. Later-planted crops were potentially higher yielding, but processing problems in the Gisborne factory dropped daily intakes down, leading to a backlog of crops waiting to be harvested. In late March, rain increased the disease pressure on these crops leading to lower tonnages per hectare. In Hawkes Bay process tomato growers had a very good season with the climate providing ideal conditions for growth through the season and at harvest time. Average yields at 100 tonnes per hectare were well up on last season’s average of 78 tonnes per hectare.
Covered crops
Auckland greenhouse producers experienced good early spring conditions until October, with better winter light levels than in 2005, and mild temperatures. Summer light levels were high until the beginning of February and temperatures have been approximately 1.5 degrees Celsius warmer than long-term average temperatures. Higher summer night temperatures made for more difficult growing conditions.
Growers of covered crops in the South Island had an average year. A lack of consistent hot days and the variable summer weather increased the number of crop flushes, resulting in periodic oversupply and a reduction in demand for salads.
Tomato growers continue to quit the industry. The growers currently quitting the industry are the medium-sized operators, growing between 3000 to 10 000 square metres. Many of these operators expanded to capture economies of scale, but now face high debt servicing and escalating operating costs. By contrast, many of the old unheated glasshouses are able to remain in business. This is because the growers’ main income is off the property and they have no labour costs or debts. Unfortunately, the lower quality fruit that generally comes out of these operations is setting the benchmark price, lowering returns across the whole industry.
Fresh tomato exports for the 12 months ending March 2006 totalled 4922 tonnes, with an FOB value of $11.3 million. This is over 75 percent higher than the proceeding 12 months. In October and November 2005, export volumes were 82 percent higher than the previous year. Part of this increase was attributed to hurricanes in Florida that forced Japanese buyers to source tomatoes from elsewhere.
The value of capsicum exports for the year ending March 2006 was $27.3 million FOB from a volume of 5575 tonnes.
Financial position
The recent drop in the exchange rate has come too late in the season to benefit most exporters. Growers are hopeful that the exchange rate will remain at its current position or lower to enable them to receive better export returns for the crops they will be harvesting later this year.
Revenue
Potatoes
Prices for potatoes have been consistently poor this year, although slightly improved on the previous season. The poor results were put down to an oversupply of both seed and fresh potatoes. The overseas market is weak, with slow sales. As a result of these continuing poor returns it is expected that a number of both seed and fresh potato growers will quit the industry. Growers received an average of $330 per tonne for their fresh potatoes this season and an average of $170 for process product.
Onions
Onion prices have been better than last year, but are considered only adequate by growers. Some contracts for onions destined for Europe have a minimum price guarantee of $300 per tonne FOB as long as they meet 85 percent pack-out requirements when they arrive. These contracted onions are expected to fetch $350 per tonne FOB. Prices into the United Kingdom are slightly higher at $350 to $375 per tonne. The Japanese market delivered poor prices which were compounded by the high value of the New Zealand dollar against the Japanese yen. Onion growers are hopeful of improving returns as the value of the New Zealand dollar falls.
Squash
Squash returns, as usual, varied widely through the season. Little early squash was available for export because of the spring floods. This early season product fetched good prices at around 60 cents per kilogram. Later in the season, as more squash became available, prices fell to around 30 cents per kilogram. With poor yields, later crops would have barely covered the cost of production. Overall, squash prices were similar to the previous season at approximately 40 cents per kilogram.
Greens
Green growers continue to comment about the distorted supply and demand mechanisms operating in the market for their produce. It is reported that prices paid to growers are held at or below $1.49 per head in order to minimise consumer resistance once retailer margins are added. Growers feel that greens continue to be used as a customer drawcard, or a loss leader in the major supermarkets.
The summer lettuce price at $8.50 per crate was 6 percent ahead of last year’s price.
Cauliflower prices this year were 30 per cent lower than last year at $7 per crate. Broccoli growers received similar prices to last year ($16 per crate).
Asparagus
Waikato asparagus growers (who mainly supply the fresh export and domestic markets) achieved prices of approximately $2.30 per kilogram for their crop. Returns of $2 per kilogram were on a par with last season for process growers in the lower North Island and South Island.
Process crops
Process crop prices have remained static for the main crops of peas, beans, and potatoes. A poor freezer pea harvest season in the United States allowed New Zealand exporters to capitalise on what would otherwise have been a difficult marketing season.
On average, process pea producers were paid $330 per tonne. Prices for processed sweetcorn for Gisborne growers were on a par with last season at around $150 per tonne. New growers in Ruatoria were paid only $116 per tonne to take into account the transport costs to the Gisborne processing plant, 2.5 hours south. Tomato prices were on a par with previous seasons, at $100 per tonne.
Covered crops
Tomato prices to the end of April were 10 to 20 percent less than last year, translating into an average price of around $2 per kilogram. Prices were high for growers with produce to sell in May.
Expenditure
Growers have commented that they are carrying significantly increased costs from energy, seeds, fertiliser, transport, labour, compliance, and land (to either rent or buy). They note there has been no corresponding increase in product prices.
For greenhouse growers, energy costs have risen by as much as 50 percent in the past 12 months, rising from $8 to $10 last year, to $15 per square metre this year. The reprieve that growers felt they had received with the decision not to introduce the proposed carbon tax has been short-lived, as the overall increase in fuel costs is two to four times what the carbon tax would have cost.
The cost of labour has been a significant issue for many growers. Asparagus growers, for example, faced a 15 percent increase in their harvesting costs. For many growers, the cost of harvesting a block was higher than the potential income from the product, and the decision was made to finish harvesting earlier than planned.
The increase in the minimum wage had a significant impact on growers. Along with increasing the hourly rate of those on the minimum wage, it also flowed through to all staff wages, as the differential between those with experience and those starting out decreased. There is no additional revenue to cover the higher labour cost.
Net result
The gross margins for the various vegetable crops in Table 5.1 provide an indication of an average farm gate return per hectare for the season. The gross margin considers the revenue for a particular crop less all the direct costs associated with growing that crop. The figure does not consider overheads such as administration, debt servicing, taxation, or drawings. The actual result for an individual grower may be quite different from the gross margins presented, due to individual circumstances. In particular, the net result will vary significantly between squash growers, given the excellent yields achieved in Hawkes Bay, and the very poor production from Gisborne due to the floods and subsequent disease issues. Also, the mix of crops grown by a particular grower may moderate the net effect of these gross margins.
Table 4.1 provides a summary of the average prices, yields and gross margins generated during the 2005/06 season for the major vegetable crops grown in New Zealand.
Issues and trends
Growers feel that the Commerce Commission decision to allow just two major supermarket chains has been extremely detrimental to them, and has not resulted in lower prices for fresh fruit and vegetables being passed on to consumers. Almost universally, growers are experiencing lower domestic wholesale prices while retail prices continue to climb. Growers are cautiously welcoming the introduction of a new supermarket competitor, The Warehouse, as it may mean more competition for vegetable supplies. Horticulture New Zealand is actively involved in the recently formed New Zealand Fair Trading Coalition. The New Zealand Fair Trading Coalition has been set up to lobby for law reform in many areas where smaller businesses are perceived to be at a competitive disadvantage compared with large commercial entities.
In December 2005, the Government announced that the carbon tax would not be introduced in its proposed form. This news was warmly received by vegetable growers, particularly those involved in the greenhouse industry. However, growers are still anxious to see the detail of the proposed narrow-based carbon tax. They fear they are not yet “off the hook”, and may still face some sort of charge as a result of their relatively high energy inputs. As it happens, the increase in fuel costs has been two to four times what the implementation of the carbon tax would have cost, and new energy efficiency measures are required to stay in business.
Table 4.1: Vegetable gross margins, 2005/06
| Price ($) | Yield per hectare | Gross margin ($/ha) |
|
|---|---|---|---|
| South Auckland/Waikato | |||
| Asparagus (tonne) | 230 | 6 | 2 310 |
| Onions (tonne) | 350 | 35 | 1 630 |
| Potatoes – table (tonne) | 330 | 45 | 1 230 |
| Greens | |||
| – Cauliflower (crate) | 7 | 1 735 | –480 |
| – Broccoli (crate) | 16 | 1 000 | 4 710 |
| – Lettuce ( crate) | 8.5 | 3 800 | 6 445 |
| Hawkes Bay/Gisborne | |||
| Squash (tonne) | 400 | 13 | 945 |
| Sweetcorn – process (tonne) | 150 | 19 | 1 285 |
| Canterbury | |||
| Peas – process (tonne) | 330 | 6.5 | 1 230 |
| Potatoes – process (tonne) | 170 | 65 | 2 740 |
| Onions (tonne) | 300 | 40 | 2 460 |
Source
Fruition Horticulture, AgriLINK NZ, and Canterbury Agriculture.
Growers believe there is a lack of consistency in the financial assistance to growers affected by adverse climatic events. Comparisons are being made between the level of assistance given to growers affected by the February 2004 floods in the lower North Island, and the Gisborne growers twice affected by floods during 2005. Gisborne growers were hopeful they would be offered compensation to replant their crops, as the lower North Island growers were in 2004. However, the damage caused by this year’s Gisborne floods was not as extensive as in the 2004 flood event, and government help was limited to enhanced Taskforce Green assistance focused on cleaning up the affected areas, and income support via the Rural Assistance scheme.
Biosecurity issues continue to worry growers. Gisborne sweetcorn growers were disturbed and surprised to read in a magazine article in May that a new maize and sweetcorn disease “boil smut”, caused by the pathogen Ustilago maydis, had been discovered in Gisborne in January. Biosecurity measures have been taken, and the site is being treated to eradicate the organism from the site. The outbreak of the smut calls into question the effectiveness of seed treatments on imported seed as obviously the smut originated from the United States. Gisborne growers are also concerned by the spread of the weed species broomcorn millet which is difficult to control. It is thought to have entered the country as an impurity in budgie seed. Another weed pest, Noogoora bur, has been found in Bay of Plenty maize crops. This pest is described by Australian and American producers as their worst weed to control and is believed to have entered New Zealand in imported seed.
A Northland helicopter pilot has been found guilty of illegally discharging herbicide spray into a Northland stream and causing substantial losses to two growers in the area. The contaminated water was used to irrigate crops, which subsequently died. The Northland Regional Council undertook investigations and concluded that the crops were poisoned by herbicide in the irrigation water. The legal process was extremely long and drawn out, and is ongoing, with appeals currently under way.
The processing potato industry in the Manawatu and Hawkes Bay has been hit by the planned shut down in December 2006 of the McCain Foods processing plant in Fielding. The plant has become uneconomic due to a combination of high labour and raw product costs, and poor seasons including the Manawatu floods in 2004. McCain Foods will concentrate its production around its Timaru plant where it has contracts with fewer but larger growers who are able to achieve economies of scale and higher yields. The closure has left many growers in a precarious position, particularly those with significant specialist capital invested. Beyond the immediate growers, the closure also affects many supply companies. It will also further suppress fresh potato prices through a combination of increased supply from growers switching to producing fresh potatoes, and reduced demand from McCain Foods for additional potatoes from the fresh market. The closure of the Feilding facility will increase the area of crops grown and competition for land in mid and South Canterbury.
The restriction on the importation of new potato lines due to quarantine rules has been largely resolved. Quarantine facilities have been accredited in Scotland and Level 3 facilities are now also available in Gisborne.
Higher labour costs (estimated at 15 to 20 percent) continue to be a big issue for growers. Changes in holiday allowances, sick leave and bereavement leave give employees the potential of another 13 unworked but paid days per year. Accommodation and travel add to labour costs. Growers are finding it very difficult to employ suitable labour prepared to work in the rural environment. In a competitive environment where high quality produce is essential, a number of workers that present themselves for work do not have sufficient skills. There is a trend towards increasing contract harvesting for picking and packing, as well as for additional mechanisation to reduce labour costs. Under tight margins there is little opportunity to pay additional labour costs. Grower representatives have been working with the Government to ease the pressure on labour supply. Initiatives such as the changes to work permits (the Working Holiday Scheme, the Seasonal Work Permit, and variation of conditions on work permits) and the seasonal labour co-ordinator proposed for the Pukekohe region have been welcomed by growers.
Horticulture New Zealand continues to advocate on behalf of vegetable growers on resource management issues. Of particular concern are strategies proposed to limit the impact of vegetable growing on the environment. Growers believe these strategies are unworkable and unlikely to achieve their intended aim. Submissions have also been made on behalf of growers on policy issues such as the recently published Water Programme of Action.
The number of vegetable growers in the country continues to decline. Figure 4.3 provides a graph of the change in grower numbers over the years.
Despite fewer growers, the value of vegetable exports from New Zealand remains the same, with exports for the year ended March 2006 totalling $474.9 million. This is 1 percent higher than the previous year.
Figure 4.3: Number of vegetable growers, 1999, 2003 and 2005
Source
NZ Horticultural Facts and Figures 2005, HortResearch, Fresh Facts 2006,
HortResearch.
The recent drop in the exchange rate came too late in the season to benefit most growers and exporters. The lower exchange rate is having an effect on the costs of inputs (fuel, packaging, and freight), but will increase the cost of competing imported vegetables, and increase export prices at FOB. Growers focused mainly on the local market consider they are worse off under the lower exchange rate situation. The current higher fuel costs are likely to add costs throughout the vegetable supply chain over the next season.
The American owner of Cedenco, SK Foods, has made further investments in the processing and marketing sector. Last year it bought out the Gisborne-based vegetable processor and marketer Sunrise Coast Ltd, and the Hawkes Bay-based asparagus processor and marketer Circle Pacific Ltd. The deals have given growers in both regions renewed confidence that outside interests see value in New Zealand’s vegetable growing and processing sector.
The removal of approximately 650 hectares of apple area in the Hawkes Bay region proved a boon for vegetable growers in the area. Growers believe that their excellent results this year can mainly be attributed to the access to high quality land that had previously been used for growing pipfruit.
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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