Forecast returns looking brighter for Zespri’s battered kiwifruit growers

New Zespri orchard return forecasts bring a little sunshine after tough two years.

Global kiwifruit marketer Zespri is forecasting a lift in returns for growers for the 2023-2024 season and a slight improvement in its own net profit range for FY24.

The exporter has also launched a US$2 million ($3.3m) contestable innovation fund to find international partners to help it address some of horticulture’s biggest challenges, including climate change and emissions.

On the back of an industry-wide drive to address fruit quality issues, Zespri said per tray returns for all fruit categories other than its sweet green variety have improved on its August forecast. Forecast returns per tray for green, organic green and red fruit were at record levels while forecast returns for best seller SunGold were also above last season’s orchard gate return.

After a tough two seasons marred by extreme weather events and serious fruit quality issues, the world’s biggest kiwifruit marketer in a grower update said forecast per hectare returns were also up across all fruit categories from the August outlook, with SunGold, green and Green14 returns now above final 2022 season returns.

Zespri’s corporate net profit after tax for FY24 was now expected to be between $165m and $175m, including income from growing licences.

In August the forecast was for a net profit of $155m-$175m, including licence release income.

The new contestable innovation fund is called ZAG. Zespri chief executive Don Mathieson told the Herald the company wanted to attract the interest of the world’s best and brightest in addressing Zespri’s major challenges as it grows.

“We are seeing some really tough challenges to think about in the medium to long term, particularly around climate change and growing conditions. We have a requirement to move the industry forward in a sustainable way....horticulture is a growth story as more and more consumers in the world want to eat healthier.

“We want [innovation] companies to see the great growth opportunities we have.”

ZAG hopes to attract innovators in high-challenge areas such as sustainable agriculture, technology, automation, packaging, supply chain, logistics and industry education.

Successful contenders would partner with Zespri.

“Our ambitions are greater than our capabilities, and with this in mind we are inviting others to partner with us to help solve challenges that impact our fruit and the wellbeing of people, communities and the environment,” said Jiunn Shih, Zespri’s chief marketing, innovation and sustainability officer in an industry update.

The new returns forecast offers relief for Zespri’s green variety growers who have been most affected by the recent downturn in prices.

They are now forecast to receive $9 per tray compared to $8.10 in August. Their forecast range has improved to $8.75 to $9.25 per tray from $7.80-$8.60 in August. The forecast range per hectare is now $60,000-$64,000, up from $54,000-$60,000.

SunGold growers are forecast to receive $12.35 per tray compared to $11.50 in August. Their range per tray has lifted to $12.10-$12.60 from $11-$12 in August, and their forecast indicative range per hectare is now $138,000-$143,000. In the August forecast it was $125,000-$137,000.

Organic fruit per tray returns have been lifted but forecast per hectare returns for these varieties remained below last season’s returns, Zespri said. The per hectare forecast was affected by this season’s lower crops.

Zespri’s total fruit and service payment across all fruit pools and excluding loyalty premium was forecast to be between $2.16 billion and $2.21b.

Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.

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