Financial Factors
Revenue
Prices realised on the local market were very disappointing. In contrast to last year, which was buoyant for the whole season, prices started low and never recovered. Table 3 gives an indication of the reduction in the wholesale selling price from last season.
Leading commentators in the Hawke's Bay industry claim the summerfruit domestic market was down 20-30% in overall returns. Reasons for this are thought to include increased supplies; poor demand, particularly in the Auckland market; Californian product setting retail price levels; and increased volumes of controlled atmosphere stored apples.
Source: AgFirst Consultants Hawke’s Bay Ltd
Expenditure
There are large fluctuations in the costs of production of summerfruit. The many variables - including cultivars, tree management, crop loading, relative fruit size, eventual market destination and overall quality - make the estimation of an average gross margin very difficult. However, an indication of average production costs are listed in Table 4.
Production costs include all on-orchard costs, with the exception of overheads and interest. Post-harvest costs include items such as packing, packaging, freight, coolstorage, and commissions.
Some of the returns must also be amalgamated, e.g., the normal division for packing cherries is 70% export, 20% local, and 10% waste.
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