McCain cuts crop contracts

McCain Foods has slashed its contracts for process peas and sweetcorn in Hawke's Bay.
The move to cut the area of peas by 60 percent and sweetcorn by 30 percent is driven by a relentlessly high New Zealand dollar.
The company, which is based in Hastings, has cut contracts for both the area planted and the price they will pay for the harvest.
The timing of the move has disappointed growers, although all spoken to by Hawke's Bay Today understood why the cutbacks were needed.
McCain told growers in September, just before the planting season started, that they were pulling out of Wairoa and the Manawatu altogether.
Managing director Ian Wilmot said the company was trying until the last minute to firm up overseas orders "and hoping for the best".
"Unfortunately, we were not able to do it."
The company have cut the area of peas by almost 60 percent to 800ha and sweetcorn by 30 percent to 1500ha. The cuts involve dozens of growers but Mr Wilmot said the total was confidential.
In a double whammy, prices have been cut as well.
Peas are back about 8 percent, to $300 a tonne on average, for good-grade peas. Standard sweetcorn varieties are $146.48 a tonne, and supersweet, which is harder to grow, is worth $156 a tonne on average.
The price McCain pays its growers depends on their distance from their plant in Omahu Road, and the grade of their crop. This mean growers with smaller areas are hit less because their paddocks tend to be nearer Hastings.
Many of the Wairoa growers have been picked up by Gisborne-based processors Cedenco and others have planted other crops such as squash.
Otane farmer Hugh Ritchie grows peas and sweetcorn for McCain. He said the big issue for McCain and other exporters was the high dollar and interest rates rather than Chinese production.
"We might have to tough it out. How else do we change things?"
McCain had enough vegetables in storage not to have to plant any this season.
"A hard-nosed business decision would have been not to plant any more, but they didn't do that.
"They could have shut up shop and left us with no processor but they have worked hard to drive costs out of the industry and to support cost-effective ways of growing, such as the LandWise group."
The best way for consumers to choose home-grown vegetables was to insist on country-of-origin labelling, he said.
Bearsley Farms cropping and contract manager Andy Lysaght said his company would be planting about 125ha of sweetcorn this year, compared with 250ha last season.
Bearsleys also harvests the Hawke's Bay crop for McCain and the cutback would mean "a big hole in their budget," especially the total pullout from Wairoa.
VegFed executive officer Sarah Bromley said growers all understood McCain's need to cut production. But she questioned why they had done it so late in the season.
"Growers would have been committed to land leases, machinery and labour and it was too late to make other arrangements," she said.
Replacement plantings of squash put in by some growers would flood those markets.
"We must work together to make this industry work and good, timely information is vital to that."
She said Veg Fed would be writing to McCain to let them know how they feel and to work out a way to avoid a repeat next season.
"It's not what they've done, it's how they've done it."
On the issue of the safety of Chinese imports she said that if the food had been imported legally then it had been tested to a standard approved By New Zealand.
"All New Zealand produce is safe so the best way is to eat only New Zealand vegetables."
Heinz Wattie's situation is different. Agriculture manager Ivan Angland said their sweetcorn plantings were cut by 7 to 8 percent.
They grow sweetcorn in Hawke's Bay only for canning so need much the same area each year. This area is "significantly less" than McCains.