There's gold in them thar' acres

The kiwifruit industry is aiming for $3 billion in exports.

New crop varieties, good consumer demand and sound marketing have put kiwifruit back on the map for prospective investors and orchard owners wanting to participate in the sector's success.

Simon Anderson, Tauranga-based national country manager for Bayleys said his team are fielding daily calls from interested parties prospecting for opportunities to invest in a sector that has fully recovered from the devastating impact of Psa in 2010, and looking to a bright future.

"The impact of Psa was like a bomb going off for the industry and for the Bay of Plenty region. However I think few people outside the region, or even the industry, appreciate just how quickly and comprehensively the industry dealt with the impact and turned itself around."

Instrumental to that turnaround was the changing out of gold kiwifruit hybrids, from the Psa devastated Hort16a variety to the more Psa tolerant SunGold fruit.

While Psa is still present in orchards, better management and plant tolerance are helping keep its worst early effects at bay. This has meant SunGold volumes have surged to 30million trays last year, and likely to surpass 50 million this season.

Meantime the industry's stalwart Green crop continues to benefit from improved orchard husbandry and skills in Psa's wake, and anticipated to generate more than 70million trays this year.

Anderson said the healthy outlook for crop volumes is being matched by strong consumer demand across both fruit types, with SunGold proving popular with both European and Asian buyers.

In March Zespri announced it would be releasing a further 400ha a year of SunGold licences over the next four years, boosting potential fruit volumes by an additional 24million trays on top of the 4800ha already planted and producing.

The overall goal of the industry is to double its export value to $3 billion by 2025. Even before the 400ha additional area for SunGold is accounted for that variety is on track to earn $1 billion in sales by next year.

Tauranga registered valuer Dylan Barrett of Preston Rowe Paterson said the positivity of growers and sound market returns were keeping prices firm for both SunGold and Green orchards.

"We are seeing sale prices exceeding $350,000 a canopy hectare for high producing Hayward Green canopies, while sales of SunGold orchards are generally exceeding $550,000 per canopy hectare."

Barrett said these prices generally reflected net returns before tax of 8-10per cent dependent on forecasted production and running costs. Comparative returns are difficult to achieve elsewhere within the current low interest rate environment.

"But of course there is a level of risk purchasers need to be prepared to accept, given the horticultural nature and the associated risk aligned with horticultural investment."

He was cautioning buyers not to be too overly optimistic when forecasting production, given the varying nature of weather patterns between growing seasons.

"A top-producing green orchard is capable of yielding crop volumes of 12,000 to 15,000 trays per canopy hectare, but a more conservative approach to budgeting would be to work on 11,000 trays, and treat anything over and above that as a bonus."

Longtime Bayleys Te Puke agent Mark "Snow" Williams said he was quietly proud about how the sector had recovered from Psa.

"It is a sector that has many innovative, optimistic people in it and that shone through over that crisis."