PGG Wrightson rural and lifestyle sales consultant Stan Robb says his best sale to date included $1.4 million for a hectare of gold kiwifruit with crop included. Photo / File
PGG Wrightson rural and lifestyle sales consultant Stan Robb says his best sale to date included $1.4 million for a hectare of gold kiwifruit with crop included. Photo / File
Top kiwifruit orchards in the Bay are worth 10 per cent more than last year - and are at record levels - but industry experts say spiralling prices will exclude some new growers who want to get a gumboot on the ladder.
Returns of 10 to 20 per cent weredriving up prices while Zespri licences for Gold 3 kiwifruit had jumped by more than $100,000 per hectare.
PGG Wrightson rural and lifestyle sales consultant Stan Robb said he recently sold one hectare of gold kiwifruit, which included the fruit, for $1.4 million and it may have only fetched $500,000 to $600,000 five years ago.
Robb said it was the same scenario for green kiwifruit, today a quality green canopy per ha with fruit could fetch $600,000 - five years ago it may have fetched $200,000 to $300,000.
Meanwhile, bare land in a good growing area like Paengaroa had doubled in price per ha to between $250,000 and $300,000 - in the past two years.
''You know, you get a six canopy ha orchard of gold with a house on it. And all of a sudden, you're talking seven to eight million. Well, there's not that many people around that have got that sort of money.''
By his estimation, a quality gold orchard could produce about 18,000 trays.
''The payout appears to be about $11 a tray so that could be mean an orchard gate return of about $190,000.''
Demand was still there though, Robb said, and it was the strongest he had seen the market in his 30 years in the industry.
Bayleys rural real estate specialist Snow Williams says production and location play a big part in the value of an orchard. Photo / File
Bayleys rural real estate specialist Snow Williams agreed kiwifruit orchards continued to rise in value.
Recently he sold a green kiwifruit orchard for more than $600,000 a hectare with fruit on but it was top of the line.
He said many factors came into play when orchards sold for very high prices.
''It is not only production but also location. You can have an orchard in a great location which may not be producing to its potential and some buyers will come in and recognise that.''
The dynamics were also changing, he said, as younger growers stepped to the fore and were employing the best methods to increase productivity.
''We used to think 10,000 trays a hectare was good but now to achieve 20,000 trays per hectare for green - you would have thought it's not possible but it has been done.''
Williams said Zespri gold licences were another huge value driver and he had sold outstanding gold orchard for a nudge above $1.35m a hectare with crop, however, in his view that may be unsustainable.
''The licence prices have been a huge factor and I don't think that is tangible forever as it's a point in time when that demand exists.''
Now, however, demand exceeded supply and he hoped sellers would seek the help of a professional agent when selling so the orchard could be put to the market, which would set its value.
Orchard prices were at ''record levels'', he said.
Realty Group Ltd managing director Simon Anderson said the demand in orchards would continue, especially when considering overseas markets in the short-to-medium term.
''The market has gone to a new level, which is positive for the industry. This wrapped with a bit of caution with long-term continued viability, but with those new levels and returns from orchards are strong enough to justify those values.''
The skillset of growers had also enabled higher production, he said.
New Zealand Kiwifruit Growers Inc chief executive Nikki Johnson said the high prices being paid for orchards reflected the strong growth and returns that the industry was projecting over the next 10 years.
New Zealand Kiwifruit Growers Inc chief executive Nikki Johnson says the high prices being paid for orchards reflects the strong growth and returns. Photo / Supplied
''While sales this season have been strong so far, Covid-19 has illustrated the risks that growers should take into consideration in their forecasting. But while high prices for orchards can be a reflection of industry value, they can also impact upon succession planning and the ability for new entrants to join.
''Both are important factors for the industry to expand to achieve the forecast increase in volumes."
The number of producing hectares of kiwifruit in the Bay of Plenty increased by 1.3 per cent from 10,228 in 2016 to 10,361 in 2020.
At the peak of this harvest about 18,000 seasonal and full-time employees worked in the Bay of Plenty kiwifruit industry - and the more than $1.5 billion in direct payments were made to communities in the 2019/20 season.
Meanwhile, 2020 Zespri licence results reveal the median price per ha for gold kiwifruit was $400,023 compared to $290,000 in 2019 - and 700 hectares were released over each year.
