Collapse of apple exports ruins growers

By Philippa Stevenson

agricultural editor

The collapse in export prices for braeburn apples has spread to most other varieties, cutting growers' average incomes by up to $100,000.

In a market report this week, Enza has confirmed that prices for mainstay braeburn apples will be half the expected $14 a carton, and returns for most other varieties will be even lower than it forecast just a month ago.

Acting executive chairman John McCliskie said: "It's just a bloodbath, just awful.

"There's no demand at retail, and everyone's cutting ... prices just to make a sale. We did it on a couple of parcels of Pacific Rose, and no one took it up."

Pipfruit Growers deputy chairman Phil Alison said the returns were a "real kick in the guts," and forced sales of orchards were already occurring.

Other growers were trying to decide whether "to exit while they've got a little left or hang on and risk everything."

Before the latest grim forecast, a Ministry of Agriculture policy adviser, Irene Parminter, calculated the impact of lower returns on the average orchard in the main Hawkes Bay and Nelson growing regions.

She said revenue would plunge by more than $98,000 on a 12ha Nelson orchard, turning an expected disposable profit of $66,721 into a negative $31,919. (Disposable profit is the amount left over before capital purchases, development and principal repayments.)

An average 8ha Hawkes Bay orchard would have a revenue drop of $45,000, reducing a budgeted disposable profit from $13,632 to negative $31,650.

The low market returns have meant that many growers have received advance payments higher than the price their apples fetched.

Mr McCliskie said the overpayment of up to $2 million would not be clawed back as usual but would be funded from reserves.

A $25 million payout to growers from Enza's sale of juice company Frucor Beverages would be distributed as soon as growers had agreed how the money would be allocated. The distribution, equal to about $1.40 a carton, will be made on the basis of shareholdings in the new Enza Ltd.

Mr McCliskie said Enza has less than a million cartons of its 17 million total to sell and should be clear of markets flooded with a range of fruit in the next two weeks.

The glut of apples in Europe from southern hemisphere countries was being matched by an earlier and larger northern hemisphere crop.

English and French growers were being forced to send some varieties directly to juicing because prices did not justify the cost of packing.