Weather woes hit fruit and veg companies
Fresh produce trader Seeka is heading for a major financial loss, on the back of record low per hectare yields.
The company says its growth strategy and a tight focus on costs are paying off. However, labour shortages remain a key issue for both its NZ and Australian businesses.
Seeka’s total earnings in 2021 topped $310 million, 23% up on the previous year. Gross earnings touched $57m, up 32%, although the amount includes $7.6m compensation from the Government over the Psa (vine canker) claim.
Chief executive Michael Franks told an online briefing that all parts of the business “performed ahead” of what we might have reasonably expected them to do.
“We have focused on achieving excellence. The results are very satisfying,” he says.
The post-harvest business – packing, cool storing and shipping kiwifruit, avocado and kiwiberry for NZ orchard owners – was the star performer.
Revenue for this business unit rose 40% to $196m and gross earnings jumped 47% to $61.6m.
Franks says the business is the “engine room” of the company.
It faced significant cost pressures including labour charges.
Seeka was short of skilled orcharding and packhouse workers in both countries, he says.
In 2021, at a cost of $1.9 million, Seeka recruited 300 RSE workers from the Government’s 2,000 RSE quota. Including RSE workers that remained in the country since the Covid-19 outbreak, its total RSE workforce at peak demand was 480 while the company needed 1,800 workers.
For this year, Seeka has approval for 1,200 RSE workers.
The company’s orchard operations also grew its revenues – up 2% to $77m. However, lower market returns and higher production costs lowered gross earnings to $5.2m compared to $5.4m in 2020.
Seeka is now NZ’s largest kiwifruit grower – 14.4 million trays of all varieties were grown last year, up 11% on the previous year.
SeekaFresh, which exports and imports fruit, saw its revenues remain steady at $22m.
Franks says this business was knocked about by Covid. Avocado returns were soft, especially in the Australian market. Seeka had never sold a tray of avocados in Australia below A$38. Last year, the price ranged between A$12 to A$19/tray.
Seeka’s Australian business – growing and retaining kiwifruit and other Australian produce – recorded revenues of $14m, up 6% on 2020. Last year, the Australian business handled 2,100 tonnes of kiwifruit, 2,700 tonnes of pears and 120 tonnes of other fruits.
