Pipfruit growers feeling the squeeze

Large parts of the pipfruit industry will struggle to survive if it has another bad season like last year's, Pipfruit New Zealand chief executive Peter Beaven says.

Global oversupply, aggressive price cutting, the high exchange rate, leftover supplies from the Northern Hemisphere's current season and the ongoing battle to enter the Australian market have all contributed to a tough economic climate.

"There's so much debt got drawn up from last year's bad returns, another year like that is going to make it difficult for a significant chunk of the industry to survive," Beaven said.

The pipfruit crop for 2006 is expected to be down 14 per cent on last year at 279,000 tonnes, after about 1200 hectares of orchard was pulled up by growers.

However, Beaven said that was not necessarily bad news because a smaller crop would make for a more orderly movement of fruit.

The crop forecast was released at the Pipfruit NZ annual conference in Napier last week, where co-operation was a key message.

"Suddenly everybody's realised that the enemy is not the exporter that lives down the road from you," Beaven said.

Growers and exporters at the conference were realistic about the challenges ahead, he added, but also optimistic about industry initiatives. These initiatives include the development of a market panel and a country-of-origin label.

Beaven said 29 exporters, accounting for about 90 per cent of total exports, had joined the panel.

Members will get information on volume and pricing of fruit in various markets and exclusive use of the country-of-origin label launched at the conference.

Hawkes Bay is expected to be the largest contributor to the export crop this year, with 8.7 million cases; followed by Nelson, with 5.6 million cases. These two regions are anticipated to account for about 92 per cent of the export volume.

The removal of trees in all growing areas had made forecasting this year's crop difficult, Beaven said.

The braeburn apple variety harvest is expected to be down 20 per cent on last year at 5.6 million cases, royal gala down about 14 per cent at 5.6 million, fuji up 10 per cent at 1.1 million and new premium variety jazz double last year at 240,000 cases.

Long term the industry needs to be moving away from the current commodity varieties and develop the market for new premium varieties, Beaven said.

"The challenge for us is to manage the change and keep the industry viable while that's actually happening."

Another positive note was the expected good size and condition of this year's fruit.

"We expect average size to be slightly smaller for the braeburn and slightly larger for royal gala and fuji," Beaven said. "Larger fruit size gives a wider choice of markets."

However, after the challenging conditions in key European Union markets last year, growers and exporters are expected to monitor Northern Hemisphere stocks closely and may elect not to pack less preferred count sizes.

"This could have a downward impact on the final export figures, " Beaven said.