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Rural Insights Kiwifruit

Returns are bouncing back

The challenges of fruit quality and pack out yields have largely dissipated with a bounce in Orchard Gate Returns (OGR) rebuilding confidence in the market. The improved comparative OGR is positive given recent inflation of costs on the orchard.

Increasing environmental considerations

Buyers are more considered in relation to environmental factors with a primary focus on any CapEx required. Orchard layout to future proof climatic events such as hail, frost, and wet feet (flooding of roots) remain key considerations. Recent certainty provided around utilisation of sprays will assist confidence.

Water (access) remains the winner

Those with long term water access are the winners. Managing expiring consents and the “use it or lose it” approach by regional councils is often critical to preserving production and value of orchard land.

Outlook for the next 12 months

Flight to quality

Buyers are expected to continue to place a greater emphasis on the quality of the orchard development, infrastructure, and location. Sector growth has seen development of land in locations that would have traditionally been less desirable. Orchards that have greater resilience or ability to mitigate climatic events to ensure crop protection will remain a priority.

Capacity to be tested

Capacity through the supply chain will continue to be tested as national production matures. Pressure on access to labour, packhouse throughput & capacity, chilled storage and logistics are expected to drive automation and innovation. Accommodating the growth will be an important factor in maintaining sector confidence.

Wage pressure to ease in short term

Recent labour pool growth from the RSE scheme has balanced labour supply with the demand assisting the control of labour costs. Pressure expected to build in the longer term as wider industry production matures.

View full report here.



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