Demand for land to grow cherries has become a significant feature of the Central Otago rural property market.
In the first few months of this year, more than 150ha of land changed hands for orchard development.
Land prices have risen 25% to 30% over the past two years.
Cromwell PGG Wrightson Real Estate branch manager Neil Bulling said enthusiasm for the crop showed no sign of slowing down, despite a tough 2017-18 summer.
"This summer was the hottest on record, bringing the harvest forward, putting pressure on packhouses and resulting in smaller, softer fruit.
"That said, for the past few years plenty of people have been keen to grow cherries, and one challenging season has not dampened that enthusiasm.''
Mr Bulling said existing developed orchards found willing buyers at a value of more than $500,000 per hectare. However, owners were reluctant to sell.
Investors usually bought bare land, as suitable blocks sold at about $100,000/ha and if they had a good water supply were ideal for growing cherries.
Mr Bulling said establishing a cherry orchard required care.
"Once you have the land, and sufficient water available, you then need to acquire the trees.
"That is not straightforward, with the nurseries flat out and struggling to grow the trees new growers need.
"To obtain the right cherry varieties, which have a royalty on them, there is a four-year waiting list, and anyone starting now will not have an orchard planted before 2021.
"After that, it takes four years before your trees are producing fully.
"In the meantime, further irrigation and netting development is required, generally done in stages, making cashflow more manageable,'' he said.
However, once the hard work had been done, the rewards repaid the initial effort.
"If you might spend $100,000 per hectare to purchase the bare land, you need to budget another $120,000 per hectare to develop the orchard, in stages.
"Then, once you are producing cherries, an average orchard might net $50,000/ha per annum, while those that are more productive will make $70,000 to $80,000.
"That justifies the $500,000/ha value you would expect to pay for a producing cherry orchard.''
Although cherry growers suffered the same shortage of pickers this year as growers of other crops, cherries were an attractive option, particularly with their short season. Harvest takes approximately four weeks.
- Eddy Bramley