Issues and Trends
There have been few changes in the contract area and prices paid to growers for process vegetables for most of the process crops grown in Canterbury. The major processors do not plan any significant changes in production volumes, crop type and prices over the next season. Some minor processors plan a slight increase in the range and volume of product that they will process next year.
Some growers have raised the concern that prices paid for process crops have not increased for some years, while the costs of production have continued to rise. With some crops, e.g., potatoes, farmers would need to make significant investments in specialised machinery in order to grow and harvest them. Processors highlight the need to remain competitive in export markets and do not report any significant difficulty in obtaining enough production area for their requirements.
Onion exports from Canterbury have continued to rise in total value from approximately $8ÿmillion last year to over $12 million this year, which is approximately 10% of New Zealand's total onion exports. Though the total area sown, volume exported and value of onions has increased, the profitability has decreased with many growers losing money as a result of the world over-supply of onions.
Over the last four years there has been a significant investment in the supporting infrastructure for the production and packing of onions. Some growers will decrease their future onion area as a result of the poor returns this year, while others are committed to continuing production. These growers believe that onion production in Canterbury has a comparative advantage in that it does not face, to the same extent, the significant production problems experienced in other parts of the country, e.g., white rot and thrips. The export prices received for both onions and potatoes this season are believed to be the lowest for many years.
Some growers believe there is a need for better quality and earlier market signals for onions and other fresh vegetable export crops, such as via a futures market. They suggest this could decrease some of the marketing risks associated with supplying what are otherwise mainly spot markets.
Carrot exports from New Zealand are estimated to have increased by up to 60% to 16,000 tonnes this year, with approximately 80% of these grown in the Ohakune district. In Canterbury there is one specialist carrot packhouse, while other packhouses have packed smaller volumes for export. The domestic over-supply and resulting depressed prices has had an impact on export growers. Due to the high quality standards demanded in overseas markets, especially Japan, reject levels have often been high. These rejects attract only very low prices when placed on the local market.
Some fresh vegetable exporters report an improvement in service from the main quality assurance agency, AgriQuality New Zealand. There was some concern reported last year that the impacts of restructuring on this organisation might lead to a lower level of service. There have been reports that some importing countries, e.g., Australia and Japan, are applying a more strict interpretation of quarantine and phytosanitary rules, making access more difficult and costly.
Some companies perceive that proposed government policy changes in the employment area may lead to greater disruption in their relationships with workers.
Most processors report few problems in complying with the requirements of the Resource Management Act. However, some growers, especially in relation to the management of crop waste, report delays and frustrations in obtaining resource consents.
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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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