4 August 2006

MAF horticulture report optimistic for some crops

The Ministry of Agriculture and Forestry’s (MAF) 2006 monitoring report into the status of the horticulture sector paints a more optimistic picture than last year’s snapshot, with both production and prices up for many of the crops examined.

The Horticulture Monitoring Report looks at kiwifruit, wine grapes, vegetables, floriculture, summerfruit, subtropicals, export berryfruit and apiculture. Pipfruit was reported on in an earlier report released in May.

The report says the weather in the 2005/06 season was generally benign (with the exception of wet spring weather on the North Island’s east coast) and growers report high yields per hectare for many crops.

Editor Principal Advisor Irene Parminter says growers of export crops harvested in autumn 2006 reaped the benefit of lower exchange rates for the New Zealand currency.

“Improved yields and export returns have resulted in higher gross margins this year for most of the crops reviewed in this report,” Ms Parminter says. But she says growers of many vegetable crops continue to face low margins.

The horticulture report is one of a series looking at different primary sectors. It’s an annual process where MAF’s Policy group monitors the production and financial status of farms and orchards in terms of their cash income and expenditure. Trends, issues, and sector concerns are also monitored.

The reports are partially based on model operations designed to best typify average orchards or farms within specific regions. Information for each model is drawn from real growers and a wide cross-section of agribusiness.

The report says kiwifruit growers were hit hard by the high exchange rate last year and while high yields partly offset the lower prices, the model farm still made a small net trading loss in the 2005/06 year.

Ms Parminter says this year’s crop is equally large and growers are expecting better prices and margins this year.

She says the industry is strongly market focused and is working to achieve market premiums over competitors.

“The same focus on delivering a top end product targeted at the premium and super-premium market is evident in the wine industry,” says Irene Parminter.

The Marlborough model vineyard’s profits show an increasing trend from 2005 to 2007, reflecting increasing production and high prices per tonne. The Hawkes’ Bay model, however, has shown a fall in net trading profit this year, with almost static prices and production compared with last year. Growers do expect improved prices and yields in 2007.

Irene Parminter says all the sectors covered in the report note the impact of increasing fuel and airfreight costs, and labour shortages are of concern to most growers.

“Horticulture is a labour intensive enterprise and growers and post-harvest operators in most regions have difficulty finding sufficient staff to pick, pack and prune many crops,” she says. “While the industry and government agencies have worked together to address this issue, it will still continue to be a challenge in some areas.”

ENDS

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