Cyclone Gabrielle: Fresh produce prices likely to rise, experts say

Relentless downpours and flooding are likely to hit fruit and vegetable supply in the coming weeks, further pushing up prices.

“The impact will be huge,” senior Westpac agricultural economist Nathan Penny said, citing extensive damage growers have suffered.

Consumers are likely to face price hikes on fruit and vegetables at the supermarket, especially for pears, apples, stonefruit, berries and leafy vegetables.

“Leafy green vegetables will struggle with supply for a while, particularly areas harder-impacted like Northland, Auckland and the Bay of Plenty more than the South Island,” Penny said.

He said these vegetables were generally supplied to local areas, so North Islanders were likely to see higher prices and lower supply at supermarkets. Freight was challenging for this type of vegetable.

Fruit and vegetable prices were already soaring, even before the recent storms.

On Tuesday, Stats NZ said grocery food prices last month were 1.8 per cent higher than in December. But fruit and vegetable prices shot up 3.1 per cent in just one month.

Penny said meat and dairy supply will be less of an issue nationwide but will be difficult to provide to remote communities impacted by Cyclone Gabrielle.

“There is impact but because we are able to source from other parts of the country, it’s more about getting it into a supermarket and if supply can reach an area,” he said.

“This is a big event. It’s heartbreaking for many. Although agriculture is important, what matters is the impact on people.”

Infometrics principal economist Brad Olsen said Hawke’s Bay growers produced about 65 per cent of apples and pears in Aotearoa.

“There will definitely be a significant disruption on the supply of apples and pears,” Olsen said.

Hawke’s Bay also supplied 22 per cent of the country’s berry fruit and 16 per cent of stonefruits, according to Olsen.

“Given the size of supply for Hawke’s Bay, you will see it hit across the country but immediate impact will be felt in the North Island just because of the geographic location,” he said.

University of Auckland senior lecturer Dr Aadhaar Chaturvedi said the impact of current weather events on farm and fruit yields was yet to arrive.

“I suspect that it would have adversely impacted yields especially in the fruit sector. This would obviously put some upward price pressure on fruit prices in coming months,” Aadhaar said.

Speaking to RNZ this morning, Foodstuffs chief executive Chris Quin said the company had “a reasonable picture of supply” for Hawke’s Bay supermarkets.

He said Wairoa’s only supermarket had two days’ grocery supply and access to fresh green vegetables would be “difficult” in impacted areas.

Quin said options included moving fresh produce from the South Island or providing chilled and frozen vegetables to the community.

Forestry slash and debris from the apple industry is seen at the mouth of the Esk River in Hawke's Bay after the devastating floods this week. Photo / Warren Buckland

The Herald reported this week that orchards and farms producing apples, watermelons, stonefruit, onions, squash and pumpkins in Hawke’s Bay were flooded.

Olsen said he had not been able to quantify the impact of Cyclone Gabrielle yet but moving produce was now a challenge.

“With bridges washing away, how much [produce] is going to be choppered in? Seeing companies doing it themselves will have a cost,” Olsen said.

“It’s going to take longer to get produce moving around. They need to send more trucks and trailers - there’s more movement over a longer distance.”

Olsen added: “It will hit the domestic supply chain. There are no quick fixes.”

A limited level of supply over the coming weeks to months could be expected.

Recently some in the horticulture sector have raised concerns over sustainability for growers and national food security.

“Some vegetable growers in Pukekohe are reporting losses of up to 30 per cent due to the weather event that happened in that area in late January,” Vegetables NZ chair John Murphy said, referring to the Auckland Anniversary weekend floods.

He said current weather and trading conditions could deter growers from staying in business.

Murphy added: “Some growers are questioning whether they will be able to stay in the industry. This is a risk to New Zealanders’ food security, and health and wellbeing, as well as to regional economies.”