Bayleys Real Estate Ltd
Residential
Commercial
Rural
Property Services
News and EditorialLive Auctions

Rural Insight -

Share

Horticulture market update – November 2022

Rural-Insights_article-7-4_2204.jpg

Returns on crops soften this season

Maturing production and sound Orchard Gate Returns (OGR) have built confidence in the market, with strong performance of G3 SunGold Kiwifruit over the 2018-2021 seasons. Fruit quality and pack-out yields have impacted returns this past season.

Cross-sector buyers remain

Buyer interest remains from syndicates, corporates, and existing operators together with an increase in buyers from non-horticulture backgrounds. Ability to outsource operations provides a reasonably passive income stream.

Water is the winner

Without stating the obvious, 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 the production and value of orchard land.

Outlook for the next 12 months

Margins squeezed

While horticulture remains one of the higher returning rural sectors, the hangover of supply chain disruptions and labour shortages experienced this past season, along with rising operating costs on-orchard, are expected to squeeze margins.

Values expected to soften after a big boost

Prices for kiwifruit orchards are expected to soften after several year-on-year gains. Sale processes are generally taking longer as buyers undertake more due diligence and time to understand seasonal conditions. Price expectations amongst buyers have softened relative to early 2022, however, prices remain elevated compared to pre-pandemic levels.

Opportunity in wider horticulture

The cyclical nature of commodities has impacted avocado OGR. With the industry developing further access to the Asian marketplace and this provides buying opportunities.

Download full article (PDF)

Contact us

Office Hours
Office hours: 8.30am-5.30pm, Monday - Friday
Contact Phone
0800 BAYLEYS
Contact Email
enquiries@bayleys.co.nz
Location
Bayleys House, 30 Gaunt Street, Auckland Central 1010