A Coromandel orchardist is calling for changes in the avocado industry.
Allan Dickinson has about 600 hass trees on 7 hectares of his Angus breeding farm at Matarangi.
“Returns have never been worse. Basically, there’s an oversupply,” he said.
“The New Zealand avocado industry has traditionally relied on the Australian market as its main export partner.”
In his opinion, the industry had done little to market its produce to the rest of the world.
Dickinson described the current situation as a “perfect storm”, with domestic retail prices down 50% on last year.
He urged anyone considering planting avocados to think again.
“Last year in March, avocados cost $3.82 in the supermarket and this year’s price is $1.95.
“The returns are pathetic and hardly even worth picking the fruit.”
Avocado Growers Association chief executive Brad Siebert agreed.
“It’s been an extremely tough season,” he said.
“Extreme weather events have resulted in a lack of export fruit being available to supply significant volumes to some of our Asian markets, this also meant that some months experienced an oversupply to the domestic market.
“However, this season we have sent to a greater number of export markets than ever before including the US and Canada.”
Dickinson said oversupply was driving domestic prices down and export markets weren’t picking up the slack.
What used to be a modest industry in Australia was now overproducing so it was not only supplying its own consumers but also moving into India and the Asian markets.
Dickinson said the New Zealand industry’s governing body should have been cultivating those markets years ago.
Siebert said Australia had recently gained phytosanitary (plant health) market access to Thailand and India.
“Our exporters are therefore seeing increased competition in our export markets from a number of different origins.”
Siebert said over the past decade NZ Avocado’s Primary Growth Partnership programme focused on market diversification, with the development of a wider range of markets being a dedicated focus in the new industry strategy.
He said New Zealand was fortunate to have the natural advantage of a relatively low pest status, supported by strong biosecurity measures, which ensured exporters continued to have access to over 70 countries.
“Historically, 85% of our fruit has gone to Australia for two reasons; because it is close and they pay well.
“But a huge amount of work has gone into diversifying and finding a premium window for our exports so this has dropped to 50% in more recent years.
“Past work by the industry as a whole has created market opportunities and this concerted effort to create trade opportunities is coming to fruition now.”
Dickinson said he was also frustrated that regulation and legislation wiped out grower returns.
He said the supply chain was unwieldy and costly.
“With an average retail price for avocados being around $2.16 this year and the grower receiving approximately 42c of that, there is a lot of margin going elsewhere.”
He believed the immediate future for the avocado industry was bleak.
Yield for the 2023/24 season was a total of 4.7 million trays, compared to the previous year’s 7.2 million trays.
“The forecast is that yields will be back up to close that for the 2024/25 season, so the oversupply situation is only going to get worse.
“We need to do more to account for the increase in production and warn the wider public and potential growers of what’s going on.”
Siebert said NZ Avocado confirmed the early estimates of a higher crop volume for the season ahead, which would mean a greater supply for increasingly diverse market opportunities.
He said to ensure growers made the most of this, the industry was looking at all the levers that could be utilised to reduce the compliance burden and create faster and easier trade.
“There aren’t many high points when you’re a farmer,” Dickinson said.
“At the moment, there’s not enough support or understanding for those of us who risk millions of dollars to do their best to feed people.
“We’d be better off leaving our money in the bank and collecting the interest.
“I, like most farmers, do it for the love of the land and the love of providing top-quality food for people who appreciate it.”
However, NZ Avocado was reassuring growers its groundwork and renewed focus was about to pay off, Siebert said.
“As an industry contributing only 2% of world supply, we need to look at how we find value and differentiate ourselves; our sustainability credentials, our food safety systems and our pest status hinges on us having strong biosecurity and recognised assurance programmes right across the supply chain.
“We’ve unveiled a new strategy just in the last month that shows how we’re doubling down on finding mechanisms to meet those challenges and create an increased demand for avocados from New Zealand.”
This article was originally published in Coast & Country News