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11 May 2006
A new Ministry of Agriculture and Forestry (MAF) report into the status of
the country's pipfruit growers shows that their outlook for 2006 is for
further losses, though smaller than those experienced in 2005.
The 2006 Pipfruit Monitoring report, which features interviews with growers
and related businesses, finds that the outlook for 2006 is for a slightly more
optimistic season than the 2005 season, which saw export returns at
historically low levels.
"This relative improvement in outlook over last year can be attributed
to a more favourable exchange rate, a smaller national crop to export, and
better co-ordination from orchard to market," says the report's
author, MAF Senior Policy Analyst Nick Dalgety.
Mr Dalgety says growers and industry representatives both expect export
returns and profitability in 2006 to improve slightly on 2005.
Growers, however, are generally more optimistic than industry
representatives. Hawkes Bay growers forecast a breakeven situation, while
Nelson growers expect a small loss in 2006.
"In contrast, industry representatives in both regions believe that
market conditions for 2006 have not improved sufficiently to justify this
forecast, and that there will continue to be losses, although less than those
experienced in 2005," says Nick Dalgety.
Mr Dalgety says that the exchange rate has depreciated about 10 percent
against the Euro since the time growers were surveyed in January. If this
rate is maintained grower returns this season should improve on those predicted
in the report.
The 2005 season, says Nelson-based Mr Dalgety, was a harsh year for those in
the industry and followed a year of losses in 2004.
"A number of growers quit the industry, and more can be expected to
follow if returns are poor again in 2006.
Export returns in 2005 were particularly low for our main apple varieties,
Braeburn and Royal Gala. Prices fell 35 percent and 12 percent
respectively. As these two varieties make up 77 percent of the national
pipfruit crop, the low returns have seriously challenged the financial
viability of the entire New Zealand pipfruit industry.
Factors contributing to the low returns of 2005 were:
As well as industry intelligence, the monitoring report is based on model
orchards designed to best typify average growing operations in the
Hawkes Bay and Nelson regions.
Mr Dalgety says the Hawkes Bay and Nelson models experienced losses
of $8,000 and $12,000 per hectare respectively in the 2005 season. These
losses, following significant losses in 2004, forced many growers to increase
their debt levels, eroding their equity positions.
The report shows the national planted area has fallen 13 percent since 2005,
reducing the volume of fruit available for export in 2006. New plantings
particularly in the Hawkes Bay and Nelson regions have to some extent
offset these tree removals.
For further information, please contact:
Nick Dalgety, Senior Policy Analyst, Tel: 0274 500 131
Lesley Patston, Senior Communications Adviser, Tel: 04 8190163 or 027
Web link to report: