Meeting the season’s challenges

AVO UPDATE

Meeting the season’s challenges

By Jen Scoular : NZ Avocado chief executive

The avocado industry is a third of the way through a very challenging export season, with a fragile domestic market. From the supply side, the industry is looking very good. Orchards have produced well with similar volumes to last year. The size profile has returned to normal and quality is good. Export pack-out rates are also good and the trees are looking healthy as flowering to set next year’s crop arrives.

But that is the end of the good news. One exporter has reported that not one vessel they had avocados on has left on schedule so far this season. Late arrivals, changes of schedule and late departures, are daily issues being managed by exporters. Avocados are harvested to meet vessel departures, so changes to timings, or worse still, changes to the destination of the vessels, are felt by the exporter, the packer – who is clearing orchards to be harvested – and of course the grower, harvesting avocados. The New Zealand market experienced very high supply early in the season, deflating grower returns to levels we haven’t seen in a decade. The positive impact is that avocados are very good value right now.

...data shows that 69% of Kiwi households buy avocados, so this is the year for increasing demand and attracting the 31% who don’t make avocados part of their weekly shop

Nielson data shows that 69% of Kiwi households buy avocados, so this is the year for increasing demand and attracting the 31% who don’t make avocados part of their weekly shop. Hopefully, the warmer weather will mean the start of barbeques. Who can have a barbeque without some guac, some avocado in the salad and a trendy avocado mousse or cheesecake for dessert? There is discussion across the industry as to whether a much lower return means we need to cut investment to give growers a break from levies. Our calculations show that a 20% reduction in levies might save the grower $200 per hectare. But if that grower implemented best practice to increase productivity by 20%, they would increase their bottom line by $2,000. Those who have been in the industry see this year as a challenging one, but acknowledge that horticulture comes with risks. Growers have had a number of very good returns over the past ten years and are focusing on a healthy crop for 2022–23.

Those who have been in the industry see this year as a challenging one, but acknowledge that horticulture comes with risks

We are hearing that some industry participants are being blamed for the significant amount of new avocado plantings, which are starting to place additional pressure on markets. Quite simply, the investment that growers have made over more than twenty years has built the industry into a more attractive option for investors. Grower investment has added industry robustness through systems, market access and development, research, biosecurity and a collaborative supply chain. Packers and marketers have increased capability and invested to improve the value chain to support the delivery of quality avocados to our consumers. It’s this industry strength and the returns that have attracted new production. Horticulture isn’t for the risk averse. There are wonderful opportunities but there will always be down years, pests or market issues. The best value we can add right now is to maintain the investment to ensure that all future avocado crops have willing consumers, eagerly waiting for the arrival of avocados in the market.

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