Kiwifruit has become the "poster fruit" for the horticultural industry's success. Photo / Supplied
Kiwifruit has become the "poster fruit" for the horticultural industry's success. Photo / Supplied
The horticultural sector has continued to surge ahead, despite the turmoil and uncertainty Covid-19 has inflicted at a local and international level.
Latest figures from Horticulture New Zealand highlight this success, with the sector generating a record-breaking $6.2 billion of exports for the year ended June.
This is up $700 million from last year and the sector's earnings now account for 10 per cent of the country's export merchandise earnings.
Kiwifruit has become the "poster fruit" for the horticultural industry's success, now generating over a third of that export income. This is followed by wine which accounts for $1.8 billion of export earnings, and apples at $830 million.
The Covid-19 lockdown caused challenges for this year's grape harvest, with social distancing rules and limited travel affecting both processing facilities and work in the field.
Fears of Covid-19 infection spreading through facilities were unfounded, and this year's harvest ended up off the tree and vine relatively smoothly. In fact, the harvest has been so successful that some winemakers are claiming 2020 one of the best vintages ever.
For the kiwifruit sector the challenge of Covid-19 came almost the same week as harvest commenced and it was only through intense industry co-operation and effort - first seen during the Psa outbreak back in 2010 - that the harvest was kept on track.
Zespri chairman Bruce Cameron. Photo / Supplied
Zespri chairman Bruce Cameron said this year's harvest had again broken records, with over 160 million trays collected from a bumper crop, with market prospects looking extremely positive.
The harvest is expected to include a record volume of high-value SunGold fruit accounting for almost half. SunGold's success in markets continued to drive investor and grower interest in the sector.
Over the 2019/20 financial year, SunGold earned an average of $11.86 a tray, generating an OGR average of $160,000 per hectare, while Green earned $6.67 a tray, or $67,000 on average per hectare.
Many successful growers are generating gross revenue of over $200,000 per hectare on their SunGold crop, Bayleys Bay of Plenty lifestyle and country sales manager Matt Clutterbuck said.
"This is a figure that has continued to improve over the last few years. When you consider growing costs of about $50,000 per hectare, this represents a very healthy net income for a crop, and that is reflected in the value of orchards".
SunGold has proven to be adept at growing well beyond the traditional kiwifruit growing region of Western Bay of Plenty, said Clutterbuck.
Recent investments included a 250 hectare greenfield conversion now underway near Edgecumbe. Other plantings have gone in the ground around Opotiki, East Cape and Hawke's Bay.
"Supply has been increasing, but that has been driven by offshore demand for the fruit".
The recent SunGold license tender round reflects the level of industry confidence in the fruit's future with offshore consumers.
The latest 700 hectare tranche of SunGold license to grow the fruit sold for a median value of circa $400,000 per hectare excluding GST, a 37 per cent leap on last year's value.
The offering was oversubscribed by over 2:1 with growers seeking 1,660 hectares worth of licenses.
The value puts SunGold at the top of fruit license values with the next closest being Envy apples at about $100,000 per hectare.
This year also marked the first time Red kiwifruit have been offered for commercial growing after years of trial work and the 50 hectares of licenses were snapped up at a median value of $62,000 per hectare and was also oversubscribed by 110 hectares.
This comes while Zespri continues to work on tuning up Red's shelf storage life and works to lift its potential yield and fruit size.
Interest continues to be strong in orchard purchases from both investment groups and from growers wanting to expand their holdings, said Bayleys Te Puke salesman Snow Williams.
"The valuations of orchards are based on very sound economic principles, on what those crops are earning in the market rather than any particular perceived future value, and it is holding the market to very realistic expectations".
With such good sustained yield and the ability to contract management, more opportunities will open for non-orcharding investors in the coming months.
