Latest News

For everything Ruralco and Real Farmer

01Oct

Hort sector rides fresh boom times

By Richard Rennie 

For many years New Zealand’s horticultural sector has played second fiddle to the country’s major pastoral sectors but is now emerging rapidly from those shadows to surge ahead in export earning ability. This is thanks to growing investor confidence in the sector, some super smart operators and an ever widening pool of produce demanded by the rest of the world.

Horticulture New Zealand Chief Executive Mike Chapman is positively buzzing over where his sector is heading in the next decade, particularly as the industry’s declared goal of achieving $10 billion of earnings by 2020 looks like it will be easily achieved.

In 2017 the sector generated $8.8 billion in both domestic and export earnings, with wine and kiwifruit vying for the top spot, generating about $1.66 billion each.

It’s that growth that prompted an upbeat Chapman to tell this year’s Hort New Zealand conference that in addition to its economic story, the industry has a great provenance story to tell the world.

“We are producing health food, have high standards of food safety and environmental sustainability is a strong focus.”

With more people around the world turning towards a more plant based diet and seeking food that makes a positive contribution to their general health, Chapman is adamant New Zealand horticulture is in a sweet spot, presenting plenty of opportunities.

Prospects are for global demand to grow strongly due to the world’s population hitting 9 billion people by 2050.  That demand will require an eye-watering 4 billion tonnes of fruit, vegetables and pulses a year, at a time when resources including water and land are under increasing pressure.

While kiwifruit and wine have long been the big hitting glamour categories for the industry, there are also some rising stars emerging into the export arena that once had limited export presence and a fragmented approach to markets.

In the past seven years the New Zealand apple industry has moved to be the 8th largest global exporter, moving 343,000 tonnes in 2017, up a massive 32% on eight years ago, whilst also managing to lift the average Free on Board (FoB) value of the fruit per tray equivalent 55% from $22.93 in that time. 

All up the industry exported a record $691 million of fruit last year, 80% more than in 2005.

World leading growing systems, the lowest spray residues of any export country and consistently high quality fruit have all helped achieve that, and make New Zealand the number one ranked apple producing country in the world last year.

The rise in global demand for quality apples is feeding through to apple growing regions like Nelson and Hawke’s Bay, as growers plant a million new trees a year.

Hawke’s Bay is developing pathways to fill more than 700 new permanent jobs that the plantings will generate over the next seven years.

NZ Apples and Pears Business Manager Gary Jones said the job demand was projected out to 2030, with little let up.

“If anything it will increase, given current planting plans.”

He said the industry has become highly corporatised from growing to marketing now with very few “mum and dad” orchards around.

“There are a lot of very diverse jobs across the spectrum, so we need to demonstrate this to our local community that there are really interesting careers in horticulture.”

The labour issue in the apple sector is echoing throughout the entire industry, with severe shortages of pickers reported for apples and kiwifruit this season.

One hope is the government will increase the intake of seasonal migrant workers through the Recognised Seasonal Employer (RSE) programme.

But the industry is also working on a range of scholarships, training initiatives and apprenticeships to encourage more young people to engage in a sector that combines technology, outdoor work, management and horticulture in a variety of challenging positions.

Down south, cherries, long a summer fruit delight of Otago, are rapidly becoming discovered by the rest of the world.

In a sector usually based on inter-generational ownership interest has been growing form larger fruit growing interests in the past years.

The region’s delectable stone fruit have found strong markets not only among Asian consumers but also here at home.

Total production is about 5,000t off a relatively small horticultural area of 650ha, compared to 110,000t grown in the United States, and two thirds of New Zealand production is exported largely to Taiwan and China.

Summerfruit NZ Chief Executive Marie Dawkins says the Central Otago region has firmly cemented its reputation for growing premium grade cherries.

“As a market crop they also have a novelty element to them, they are only available for a certain length of time, making them particularly sought after when they do come onto the shelves.”

An efficient distribution system linked to good air freight links mean New Zealand growers are able to command a premium for optimal quality fruit their Chilean competitors struggle with.

Real estate agents in Otago report growing interest in blocks of land for planting the fruit, with non-traditional districts also finding favour as a wider variety of cherries suited to different conditions become available.

Perhaps surprisingly it is the humble potato claiming the top growth spot as an earner for vegetable growers, with the stable vegetable chalking up $111 million in export sales in both processed and fresh form last year. An additional $150 million of spuds are sold domestically.

With a tightening up of land supply in traditional growing areas like Pukekohe, more North Island growers are leasing land in Canterbury, where potatoes can play a useful role in crop rotations.

But the threat to potato growing areas underlines a broader issue, the high growth industry is struggling with the tension between land for urban sprawl versus food supply.

The issue was highlighted in August with the release of the “New Zealand Food Story – The Pukekohe Hub”, a report outlining the value of the elite soils in the Pukekohe district, and how best to preserve them for food supply.

Auckland’s insatiable demand for housing is now cutting into that valuable land, to the extent the region is likely to lose 10,000ha of high value soils before 2040, and at present only has 2,000ha of “elite” growing soil protected through the city’s unitary plan.

The relatively small soil area punches well above its weight in production and value, producing 26% of the country’s vegetable revenue and contributes quarter of a billion dollars to the country’s economy.

Changes in council rules around cropping in regions outside Auckland, including Canterbury and Waikato also mean it is difficult for operators to simply move away from Pukekohe and set up production on good soils in those regions.

Both Waikato and Canterbury now have tight nitrogen caps and land use controls in place that make changing from pastoral farming to intensive cropping nearly impossible.

“So it means we are running out of land up there, and can’t move anywhere else to continue growing for an increasing demand,” says Mike Chapman.

He said 10% of high class land is also occupied by lifestyle blocks, and the area has been increasing to the extent New Zealand has lost 30% of its vegetable growing land in the past 15 years.

He is hoping the report provides enough empirical data to back up Horticulture New Zealand’s call for a National Policy Statement for Versatile Land and High Class Soils, recognising the need to balance housing demand with protecting prime growing areas in all parts of the country.

“There is a balance that has gone too far towards urban development and needs to be reset.”

Related

Getting an independent view on farm energy options

Getting an independent view on farm energy options

Farm electricity costs have pushed on relentlessly upwards in recent years, with the past two years ...

Read More
Max out your feed budget, in a good way

Max out your feed budget, in a good way

High-octane hybrid looks after your animals and your finances.

Read More
A tough farming year finishes on mixed outcomes

A tough farming year finishes on mixed outcomes

As the farming season draws towards a close, the ups and downs of a particularly tumultuous year hav...

Read More
Farm systems project at Chertsey is future focused

Farm systems project at Chertsey is future focused

There is something interesting happening in the back paddock at the Foundation for Arable Research’...

Read More
Time for a physical

Time for a physical

A fertile soil with physical health issues can still perform poorly, so it could be time for a physi...

Read More
Agri-Chemical update

Agri-Chemical update

For the next three months we are looking at the final sprays for finishing off our cereal and grass ...

Read More




Account Selector