Tuesday, 18 January 2022 10:25

Horticulture plays its part in NZ primary sector boom

Written by  David Anderson and Leo Argent
"Pretty impressive" is how Agriculture Minister Damien O'Connor describes MPI's latest prediction that horticulture exports will hit the $7 billion mark in 2023. "Pretty impressive" is how Agriculture Minister Damien O'Connor describes MPI's latest prediction that horticulture exports will hit the $7 billion mark in 2023.

New Zealand's primary sector will crack the $50 billion mark in export earnings this year with the horticulture sector playing its part, according to MPI projections.

MPI's Situation and Outlook for Primary Industries (SOPI) report predicts that the country's annual primary sector export revenue will hit a record $50.8 billion in the year to June 2022 - an increase of 6% over 2021 earnings.

Horticulture's export revenue is forecast to rise 4.8% to $6.9 billion for the year, with increased production for both kiwifruit and apples expected.

However, lower prices due to large avocado crops in New Zealand and Australia and a reduced grape harvest in 2021 will decrease export revenue for these sectors.

Projections for the 2021 apple and pear export season has export volumes and prices performing better than mid-season forecasts. Exports are expected to reach around 360,000 tonnes (20 million cartons) and $831 million for the year to 31 December 2021.

MPI says the reduction in export volumes for the 2021 crop (down by 10% on 2020) was caused by a significant hail event in the Nelson-Tasman region in December 2020, smaller average fruit size for some varieties and labour supply challenges.

It adds that market demand from Asia has been strong with increased export volumes to Vietnam, Taiwan, India and Japan. India provided export market opportunities for apples from the Nelson region with cosmetic hail damage. Less fruit was exported to Europe in 2021 due mainly to lower production of Braeburn, Royal Gala and Jazz apples from hail damage.

A combination of a smaller export crop overall, good market demand and a greater proportion of premium apple varieties such as Rockit and Pacific Queen resulted in higher export prices (in New Zealand dollars) for most varieties.

The SOPI report projects a much smaller annual increase in the planted area of apples and pears due for harvest in 2022, compared with previous years. It says growers are responding to ongoing labour shortages, shipping disruptions and rising costs by removing poorer performing orchard blocks and varieties and investing in labour-saving equipment where possible.

There is potential for the 2022 apple and pear crop to reach up to 625,000 tonnes (up 7-12%) despite the removal of some mature orchard due to young trees maturing, higher planting densities on new orchards and assuming average climatic conditions.

MPI says the industry continues working hard to find labour to assist with harvesting this projected increase in the pip-fruit crop. This is due to current low unemployment rates and reduced numbers of seasonal workers.

The SOPI report says kiwifruit exports increased by 6% to $2.7 billion in the year to 30 June 2021.

MPI forecasts kiwifruit export revenue for the year to 30 June 2022, which includes part of the coming season starting in March 2022, to reach $2.9 billion. This 8% increase on the previous year is driven by greater volumes of gold kiwifruit.

Export production is estimated at 184 million trays for the current 2021/22 season, up 13% on 2019-2020. This includes an expected 15% increase in gold kiwifruit volumes and an 11% rise in green kiwifruit production.

Meanwhile, commercial quantities of Red19 kiwifruit marketed under the new RubyRed name are expected to come online in the 2022/23 season, which MPI says will begin to contribute more significantly to export earnings as production increases. The area of this variety is set to rise with 350 hectares to be licensed in 2022 and up to 500 hectares signalled for the year after.

The report expects continued growth for New Zealand kiwifruit exports, saying the product range is well placed in markets and has benefited during the Covid-19 pandemic from consumer preference for healthy foods and availability in supermarkets.

This avocado season was the fourth consecutive year of strong production volumes and growing conditions are favourable for the coming season. However, large volumes of fruit have resulted in weaker export demand which has pushed down prices and returns for growers. Additionally, increasing competition from South American growers, especially Chile, has cut into NZ’s Asian markets.

NZ Avocado export revenue to Australia is down 73% to $8.6 million in the September 2021 quarter, compared with the same period last year. Medium term avocado volumes are expected to rise due to increased planting worldwide which is likely to put downward pressure on prices.

On the upside, demand for avocado in Asian markets has picked up in the September 2021 quarter resulting in higher export volumes compared with the same time last year, especially for Taiwan, China, Singapore, Hong Kong, and Malaysia.

On the upside, demand for avocado in Asian markets has picked up in the September 2021 quarter resulting in higher export volumes compared with the same time last year, especially for Taiwan, China, Singapore, Hong Kong, and Malaysia.

Overall, under current low export prices and weaker export demand, SPOI estimates that New Zealand avocado export revenue to be about $115 million and 4.4 million trays for the year to 30 June 2022. This is around $43 million lower than the export revenue seen in the year to 30 June 2021.

Onion exports from the 2021 crop exceeded expectations driven by high yields and bulb quality from favourable climatic conditions. However, shipping disruptions meant that some consignments missed targeted market windows. These disruptions, along with higher shipping costs, contributed to a lower average export price for the season.

Meanwhile, MPI says growers anticipating ongoing disruptions and high costs for shipping and have reduced the overall planted area of onions for the 2021/22 season by around 4%. It adds that the anticipated recovery in export volumes is reliant on the hospitality sector being less impacted by Covid-19 and fewer shipping constraints.

Summer fruit growers in the main growing regions of Hawke’s Bay and Otago are hopeful of a better 2021/22 season. Orchards received good winter chill and fruit set has been reported as average to good.

The report says that while overall yields will be down, fruit will be of higher quality and size and easier to harvest. It expected this combination of lower yield, good size and quality should help maintain good export prices.

With summer holidays coinciding with the main harvest period growers and packers have several campaigns planned or under way to attract students to help harvest crops.

Cherry export revenue is forecast to increase to $68 million in the year to 30 June 2021, up from $55 million on the previous year. This rise in export revenue is expected to be mostly driven by a 20% increase in volume to 3 million kilograms, while export prices are expected to increase 3% compared with last year.

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