North Avocado growers face disaster

A "blimmin disaster" slashing returns for avocados has the Avocado Growers Association's Northland representative, Mike Eagles, forecasting some orchardists selling up or being financially elbowed out of the industry.

He suggested the avocado industry, which had 13 exporters, should consider following kiwifruit's single-desk Zespri model.

But others say avocado growers have been well served by the multiple exporter system and the record 5.8 million tray crop this season has benefited pickers, packers and consumers and given growers more fruit to sell, albeit at lower returns.

Some growers could be receiving as little as $2 a tray for fruit which last season earned them up to $20.

"Most growers wouldn't be covering the cost of production, which is around $6-$7 a tray," said Mr Eagles of Maungatapere. "I wouldn't be surprised if some went to the wall. If you have a big mortgage you can't afford to run at a loss for long."

Orchardists had to try to "hang in there" during the "blimmin disaster".

"I wouldn't like to try to sell an orchard at the moment," Mr Eagles said.

Someone he knew had paid $2.5 million for an orchard about five years ago and more recently sold it for $1.5 million.

Also, while some avocado growers could be considering kiwifruit as an alternative, Psa vine disease was making making that option seem "just as dodgy".

Mr Eagles attributed the collapse of local market avocado prices two or three months ago to an over-supply, which - with sources across the Tasman muddling information on timing the need for imports - had reduced avocado returns in New Zealand's biggest export market.

He favoured single-desk marketing with an organisation like kiwifruit's Zespri expanding avocado sales in big Asian markets. He also wanted to see more fruit going into oil production and into Fressure Foods' use of ultra-high pressure processing equipment which doubled the fruit's shelf life.

The chairman of Fressure Foods, the Avocado Industry Council and the Avocado Growers Association, John Schnackenberg, of Katikati, agreed returns were down, but said growers would not be so hard hit because exports were nearly doubling on last year, bringing in more per tray payments even if the rate was lower, and making 2011/12 the industry's biggest earning year.

The record 5.8 million tray crop this season was up from about 3 million trays last season. The previous record of 4.2 million trays was achieved in 2007/08.

Mr Schnackenberg said grower returns were linked to whether their exporter had links with overseas retailers. The 2010/11 season had been good for pickers and packers - both of which were delighted to deal with 5.8 million trays - and for New Zealand and Australian consumers, pleased avocados were cheap and plentiful,

Kamo avocado grower Roger Barber, vice-chairman of the Avocado Growers Association for 10 years until he stepped down a couple of months ago, said growers had "the best of both worlds" with multiple exporters.

The four largest exporters handling up to 90 per cent of fruit leaving New Zealand - Primor Produce, Southern Produce, Freshco and Just Avocados - combined competition and co-operation by bonding to market under the Avanza brand in Japan and the US, he said.

Northland has about 430 of the country's 1600 avocado export growers - 96 in the Far North and 332 around Whangarei and Mangawhai. All but a few of the rest are in the Bay of Plenty.

Far North growers - most of them between Kauri Flats and Houhora - produced 20 per cent of the 2008/09 avocado export crop, while Whangarei-Mangawhai growers produced 25 per cent and Bay of Plenty 51 per cent.