Crop losses blow Green kiwi incomes apart

Richard Rennie NEWS Horticulture

KIWIFRUIT growers have reacted with shock and dismay to the announcement from Zespri that this season’s crop payment has been downgraded again due to poor fruit quality.

In an announcement to growers and the market, Zespri CEO Dan Mathieson said Green fruit will be facing at least a further 60c-atray downgrade in payment, and organic Green a 50c-a-tray reduction.

And the figures come with the caveat that they may be even worse.

For growers it means the vital progress payment usually made in February will not be made. Amid surging orchard costs, this is the time growers pay a large portion of their season’s bills.

The news comes after an announcement back in August 2022 that growers were staring down a $1.95-a-tray reduction in Green payments, and SunGold growers had a reduction of $2.80 per tray.

The latest reduction has Green growers likely to take a collective hit of $36 million across the 70 million trays harvested, on top of the $136m blow already dealt to them in August.

Mathieson said further deterioration in fruit quality on Green’s final vessel sailings to Europe and Asia prompted the reduction, with quality on arrival much worse than anticipated.

We want a better understanding from Zespri about what they are doing to give Green growers confidence in the future of the category.

Colin Bond NZKGI

Initial forecasts for the last quarter of 2022 were for 7% losses in Europe due to quality; that has since worsened to 20%.

Repacking levels to sort through damaged fruit were reported to be at three times 2021 levels.

Meantime the growing highvalue market of Japan ended up being undersupplied by over a million trays, also because of poor fruit quality.

New Zealand Kiwifruit Growers Incorporated (NZKGI) was taken by surprise by the Zespri announcement.

In a newsletter to growers, CEO Colin Bond says the 20% fruit loss now being reported and the undersupplying of the Japanese market amount to an “unacceptable” situation.

PLEASE EXPLAIN: Colin Bond, CEO of NZKGI, has told growers the association will be seeking an explanation from Zespri on how quality losses to Europe tripled from 7% to 20%.

He wants Zespri executives to “please explain” as more Green growers face the prospect of not breaking even this season.

“We want a better understanding from Zespri about what they are doing to give Green growers confidence in the future of the category,” Bond said.

In August last year, following the initial quality payment downgrade of $1.95 a tray, it was estimated that 50% of Green growers would be in a break-even or loss situation.

One industry source estimates the latest announcement pushes that closer to 70%, with banks set to tighten lending requirements and payment expectations on growers this year.

The news comes amid expectations that this year’s harvest volume could also be severely compromised, with some anticipating crop volumes as low as 150 million trays in total.

This is well short of industry estimates of volumes that should be closer to 200 million trays on the back of increasing SunGold licence areas coming on stream this year and beyond.

Severe weather conditions, including an unseasonably heavy frost, laid waste to large crop areas in some districts, with some orchardists losing entire crops. A formal estimate of this season’s crop volumes is due to be released in February.