Hawke’s Bay apple grower stops US shipments as tariffs bite into profits

Tariffs on New Zealand apples to the US jumped from 10% in April to 15% in August. Photo / RNZ, Cole Eastham-Farrelly

By Gianina Schwanecke of RNZ

One of New Zealand’s major apple growers won’t be sending any shipments to the US as tariffs bite into its profits.

Tariffs on a range of New Zealand exports, including apples, were introduced in April at 10% and increased to 15% in August.

While tariffs were lifted last month on some exports, including beef and kiwifruit, they remain for apples, where exports were worth close to $70 million in 2023.

Fifth-generation grower Paul Paynter, from Yummy Fruit in Hawke’s Bay, said the 15% tariff essentially cancelled out his margins on any exports to the US.

Hawke’s Bay is the largest producer, contributing 64% of New Zealand’s total apple volumes.

“Fruit we shipped to the US this year returned probably a dollar less than the costs, so regrettably, we have no plans to ship to the US in this current season.

“Until the tariffs are gone, it will be difficult to make a dollar.”

Paynter said the US market was also oversupplied, and prices were not good anyway.

He was shifting to focus on other markets instead, though there are other challenges.

The other main market for bigger fruit is Taiwan, though it is still relatively small and can be oversupplied by rival exporters.

Local AgFirst horticulture consultant Jonathan Brookes said most growers were busy thinning fruit at the moment.

He said there was some market fluidity at the moment.

“The US market has tended to be overflowing a bit with its own supply.

“There’s key people in there and doing really well, but they’re quite specific.

“A lot of the markets around Asia and beyond are actually doing quite well.”

Brookes said while it was “very variety specific”, for the most part, the markets were “pretty good”.

He said it was still a long time to harvest, but things were looking good.

Despite the export challenges, Paynter was also optimistic about the coming harvest, with near-perfect growing conditions and fruit quality looking good.

He said it had been an even better growing season than the previous one, which was one of the best in many growers’ memories, and was expecting a big crop of large, clean apples from his nearly 600 hectares of orchards in Hawke’s Bay.

In some blocks, it was the largest fruit grown in 20 years of record-keeping.

“Probably the warmest spring conditions we’ve ever experienced here in Hawke’s Bay, and that early heat is what really sets the trajectory for fruit size.”

Paynter expected the coming harvest would start on time early next year.

He said growers had had a rough time since Cyclone Gabrielle, but with two strong back-to-back harvests, growers can graduate from a “swimming pool of red ink” to a bucket and hopefully would be back in the black next year.

- RNZ