New Zealand kiwifruit production is expected to break another record in marketing year (MY) 2008, up 4 per cent to 382,000 tonnes compared to the prior year, according to a recent United States Department of Agriculture (USDA) report.
The rise has been put down to an estimated 1 per cent increase in production area combined with favourable weather conditions and more widespread adoption of improved orchard management techniques, the USDA said.
New Zealand kiwifruit production is set to continue to rise over the coming years, despite declining orchard profitability, the report added.
A total of approximately 1,000ha planted to both Zespri Gold and green kiwifruit are expected to come on line over the next five years. This alone is expected to account for an 8 per cent increase in production, according to the USDA.
Improvements in orchard management techniques will likely contribute to improved yields, and a more favourable NZ$ exchange rate will contribute to improved profitability, it said. In light of these factors, national production will continue to increase between 2 and 4 per cent per annum over the next few years.
Orchard profitability reached a nine year low last year, the report said, dropping to NZ0.76 (US$0.57) per tray down from a high of NZ$3.80 (US$2.85) in MY2003.
Factors accounting for the relatively low profitability include escalating labour costs and poor orchard-gate prices, which have been low since 2004, due mainly to exchange rate factors, the USDA said. In MY 2007, the average orchard gate price (not including pack house charges) was an estimated NZ$4.45 (US$3.34) per tray (3.6 kg) down from NZ$5.18 (US$3.89) the previous year.
But the picture is expected to improve somewhat during MY 2008, according to the USDA. The recent depreciation of the NZ currency, along with favourable conditions during the start of the season in the key EU market, good fruit size and quality, and an early start to the season bode well for higher orchard gate returns in MY 2008, the USDA said.
Orchard labour costs now account for over 50 per cent of all orchard operating expenditures as the increase in the New Zealand national minimum wage has had a significant effect on harvesting and vine management costs, the report said.
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