Apple earnings give growers the pip

By Philippa Stevenson

agricultural editor

Returns to the country's apple growers' are expected to take a severe bruising after competitors beat New Zealand exporter, Enza, to its traditional market spot.

Adding to the industry's woes in a year in which many growers were banking their survival on payouts matching last year's good returns, Enza also misread the market for the mainstay apple variety, Braeburn.

In a market report, Enza has told the around 1600 growers nationwide that large volumes of previously unique New Zealand varieties were already in markets when the New Zealand product arrived.

That had "effectively forced us into a competitive battle for market share, with almost no regard for selling price," the marketer said.

The company had also accepted a greater range of sizes of Braeburns from growers, boosting the export volume of the variety by one million cartons to seven million. The extra volume of outsized apples - either smaller or bigger than the preferred export crop - had effected sales of the main crop.

Yesterday, Pipfruit Growers chairman Richard Easton the plan had been to maximise grower returns but "in hindsight it had the reverse effect.

"If we had a 1.5 million cartons out of the equation it would have been a lot easier."

Mr Easton said Enza had sounded warnings to growers "but I doubt anybody expected Braeburn, which has been a flagship variety for the New Zealand industry for a number of years, to possibly go [down in price] to the extent of the indications."

The price fall was likely to be far worse than growers expected for the variety which is grown throughout the country and is 40 per cent of the national crop.

Based on sales so far Enza has forecast a return for Braeburn of $7 to $9 a carton, well down on the budgeted $11 to $16. However, it has told growers to take a conservative view of the low figure while there was still 40 per cent of the variety to sell.

Enza said its pre-season market planning assumptions of a "bloodbath" had proved remarkably accurate but yesterday chief executive Gary Smith said what had not been predicted was the extent and timing of fruit arrivals from competitors.

"In previous years, Enza has been able to look to varietal market windows to lift sales as competitors' fruit cleared the market. This year, that opportunity disappeared as Chile, in particular, continued to ship low priced fruit in significant quantities throughout the entire season."

Mr Smith said the lacklustre market faced by all exporters, and global over-production was sending a "significant wake up call" to all producing nations.

"You can't put everything in the box and expect to sell it at a profit."

Mr Easton said the impact of reduced returns had already hit some growers who had cancelled orders for trees and machinery, put off orchard development, and "started to batten down the hatches."

"It's not good. And it's a year the industry needed a reasonable season to help restore a bit of confidence."