Kiwifruit growing spills beyond Bay of Plenty to other regions

The popularity of kiwifruit growing is spilling over into other regions outside the traditional stronghold of the Bay of Plenty, and Northland looks to have the greatest potential for future growth, ANZ said.

The bank, in a special report, said kiwifruit had bounced back following the Psa virus, helped by increasing global demand which saw kiwifruit sales rise by $694m between the 2015/16 and 2016/17 seasons.

The kiwifruit sector took a big hit when Psa ripped through Bay of Plenty orchards in 2010/11. The advent of a new Psa resistent gold cultivar, Gold3, or Sungold, has been credited with driving a recovery in the sector.

"The success of the kiwifruit sector is remarkable," ANZ's managing director for commercial and agri, Mark Hiddleston, said. "It has continued to invest in new varieties while staying connected to consumer demand and has worked hard to keep international markets alive," he said.

ANZ's report comes at a time of increased investment interest in horticulture.

Kiwifruit is grown over 2,694 hectares by 2,435 growers spread across the country.

The majority of New Zealand kiwifruit is grown in the Bay of Plenty, however with limited greenfield land available, the sale of the SunGold licence by Zespri will require alternative growing regions, the bank said.

"When entering new areas and converting from previous land usesa number of factors will need to be considered, including local council regulations, water rights, land suitability, altitude, the availability of local labour, logistics and other supporting infrastructure," it said.

Areas such as Bay of Plenty, Hawke's Bay and Northland are already established growing areas.

"However, Northland's subtropical climate and wide diversity of soil is being considered by industry participants as an area with strong growth potential, which would suit the SunGold variety," the bank said. "With an already established grower network, Northland's kiwifruit industry has the opportunity to grow."

Forecasts from the University of Waikato predict Northland's kiwifruit earnings will more than double to $72 million and the number of jobs expected to increase from 380 to 886 by 2030.

The New Zealand kiwifruit sector recorded its largest ever crop in 2016/17, generating sales of $2 billion

Kiwifruit marketer Zespri's ambition is to grow global sales to $4.5b by 2025.

Strong global demand for New Zealand kiwifruit has driven orchard prices sharply higher.
Valuations across the country have been on the increase, but the areas which have performed the best are have been the traditional growing regions - such as the Bay of Plenty - due to proximity to the supporting business network and good growing conditions.

In the Bay of Plenty, in some cases valuations have doubled from pre-Psa levels with green orchards currently valued in the $300,000-$450,000 per hectare range and SunGold orchards in the $700,000-$1 million per hectare range.

NZ Kiwifruit - Where it grows
GREEN
Northland - 1 per cent
Waikato - 3 per cent
Nelson - 3 per cent
Southern North Island - 1 per cent
Auckland - 4 per cent
Bay of Plenty - 86 per cent
Gisborne - 1 per cent
Hawke's Bay - 1 per cent
GOLD
Northland - 5 per cent
Waikato - 4 per cent
Nelson - 3 per cent
Southern North Island - 1 per cent
Auckland - 4 per cent
Bay of Plenty - 76 per cent
Gisborne - 4 per cent
Hawke's Bay - 3 per cent