4 minute read
Planning ahead key for supply of crop protection products in 2022
A Redpath shadehouse with 50% shadecloth netting fitted
Orchardists and growers are being urged to order crop cover and protection products well ahead of time due to ongoing supply delays caused by Covid-19.
By Glenys Christian
Richard Clarkson, pipfruit manager at Birdhurst Orchards in Motueka, says many orchardists are experiencing delays in deliveries of orders, with some having goods held up at overseas ports, being shipped to other destinations or delayed in transit.
It has been “quite challenging” this year and he is picking the present shipping issues will last for another 12 months. As most of the drape and hail net products orchardists use are made in Asia, all they can do is plan ahead and order more than required so they have surplus stock on hand. “I’d rather have the problem of it turning up earlier than expected and figuring out where to store it,” Richard says. While most orchardists have been heeding suppliers’ warnings about ordering early, this has proved stressful when deposits need to be paid upfront, causing cashflow problems for some and making businesses more reliant on a good production season. Glen Williams, the owner of Palmerston North-based Redpath Pacific, advises growers and orchardists to think not only about requirements for the upcoming season, but the one after that. His company builds around 40 commercial greenhouses a year in New Zealand and a similar number in Australia. This November he was involved in a budget meeting for projected 2023 building sales to ensure
suitable inventory would be on hand 12 months in advance. “It’s a very unusual way to do business so far in advance,” he says. “You need a pretty big crystal ball.” As a pre-Covid-19 effect mitigation plan put in place two years ago, the company has substantially increased its local stock holding levels and storage capacity by a factor of three. Import freight costs have tripled and delivery times doubled, pushing some of the company’s material deliveries out to nine to 18 months’ delay. Growers and orchardists would be wise to think hard about ordering outside of their traditional seasonal strategies. “It’s pretty challenging at the moment because many New Zealand businesses are set up to deliver on a ‘just in time basis’ which has worked well during normal supply chain timeframes, but that’s not the case currently,” Richard says. Niche and specialist products which have a low turnover are under particular strain. Distributors are working on timeframes of six months rather than the two months they previously used, and manufacturers are often looking to over 12-month lead times.
Sea freight costs have more than doubled and are likely to go higher, with the cost of shipping 20-foot containers from Europe already up from €2,000 to €6,000 in some cases. The impact has been felt most on lower cost materials which takes up more container space, such as shade cloth. Brokers and shipping companies aren’t expecting any change in the next year. Some shipping companies have pulled out of Australasia to concentrate on the more lucrative, higher volume global shipping routes, with New Zealand becoming a ‘niche’ destination. As a result, cargo is being sent on smaller shipping companies and ‘bunny hopping’ from port to port around the world before finally arriving here. Richard says that from a customer enquiry perspective, there has been much negotiation on price too. “The questions are much more surrounding ‘do you have the stock, what are the delivery times, and when can you build?’” A lack of locally based manufacturing industries is another weakness the pandemic has exposed, as under free trade agreements they are unable to compete with overseas suppliers. West Auckland company, Cosio Industries, which supplies a range of shade cloth and wind break fabrics, isn’t holding much stock either and urged growers to notify them in advance as to their requirements four to six months ahead, a spokesman said. James Harris, operations manager at Waiuku-based company, Apex, which provides turnkey solutions for design, manufacture and construction of glasshouses, says there is quite high demand for low iron glass due to Chinese factories shutting down. Consequently, lead times have been stretched out from the usual 20 weeks to 25 weeks. Shipping costs have increased by 70 to 80% but there are indications this could settle shortly. The building consent process has also been delayed, affecting around two hectares of developments Apex is involved in.
“Growers are still wanting to expand and the greenhouse industry is getting busier,” James says. “We are hoping things [shortages and costs] will pan out in the second quarter of next year.”
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