Orchard models show returns for New Zealand kiwifruit growers have fallen by one third, largely as a result of vine disease, Psa.
The New Zealand Ministry for Primary Industries (MPI) has released an analysis of kiwifruit production and profitability as part of its annual Farm Monitoring Report series.
The report is based on a model of a Bay of Plenty orchard and an overview of the financial performance of typical orchards, based on information gathered from a sample of growers and industry stakeholders.
This is the first MPI Farm Monitoring Report to show a significant impact from the vine disease Psa, because of the time lags between infection and the growth, harvest and marketing of the crop, a media release from the ministry has reported.
Psa was first identified in November 2010, but for most orchards in the Bay of Plenty it did not affect the yield of the 2011 crop, harvested between March and June of that year. In fact the 2011/12 season was one of record production.
Grower’s orchard-gate returns for the 2011 crop dropped due to less favourable exchange rates and larger export volumes, but this meant the per-hectare revenue was higher than the previous year. This helped to lift the before-tax profit of the model orchard by 21 per cent to NZ$66,100 (US$54.203).
Psa had a more profound effect on the 2012 crop, as significant areas of canopy had to be cut out. While the Hort16A Gold cultivar proved to be particularly susceptible to Psa, per-hectare production fell for both Gold and Green due to a combination of Psa and climatic conditions.
Per-tray returns to growers are expected to be higher for the 2012 crop, for Green because of reduced post-harvest fees, and for Gold because of higher in-market prices. But the profitability of the model orchard will still fall by a third, to around NZ$44,000 (pre-tax) for the 2012/13 year.
The kiwifruit industry’s recovery strategy is to replace Hort16A with varieties less susceptible to Psa, such as Gold3 and Green14. The MPI model has been adjusted to reflect the transition in Bay of Plenty orchards, with 0.5 hectares of Hort 16A (half of the area of Hort 16A and 10 per cent of the planted area) changed to Gold3 over the 2012 winter.
With Psa impacts on individual Bay of Plenty orchards ranging from none to severe, MPI has modelled three additional scenarios for 2012/13. Under a scenario of no Gold kiwifruit production, it is predicted that there would be a cash operating deficit, a pre-tax loss and a negative cash position, and an injection of additional cash would be required to cover operating costs and living expenses.
MPI also extended the kiwifruit model budget out to 2015/16, and the analysis shows the model would be in deficit for the next two years.
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