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Vine Disease Impacts on Kiwifruit Orchard Accounts

For immediate release

Vine Disease Impacts on Kiwifruit Orchard Accounts

The impacts of the vine disease Psa are now being seen in kiwifruit orchard accounts.

The Ministry for Primary Industries (MPI) has today 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 that shows a significant impact from the vine disease Psa, because of the time lags between infection and the growth, harvest and marketing of the crop.

Psa was first identified in November 2010, but for most Bay of Plenty orchards it did not affect the yield of the 2011 crop, harvested between March and June that year. In fact the 2011/12 season was one of record production.

The orchard-gate return received by growers for the 2011 crop dropped due to less favourable exchange rates and larger volumes being exported from New Zealand, but the larger volume 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% to $66,100.

Psa had far more of an effect on the 2012 crop, as significant areas of canopy have been cut out. The Gold cultivar Hort16A 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 $44,000 (pre-tax) for the 2012/13 year.

The kiwifruit industry’s recovery strategy is to replace Hort 16A with ones 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% 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.

To view the full report, go to the Publications section of the MPI website, www.mpi.govt.nz

This report is one of a series of Farm Monitoring reports which are being released currently.

END

CLARIFYING TIMINGS:

Kiwifruit growth occurs from around September and through the summer (with associated production costs incurred in the same financial year as the previous harvest). Harvest occurs the following autumn, between March and June. Product is then usually marketed until about December.

The crop name (such as 2012/13) relates to the year beginning 1 April when it is being harvested and during which it is marketed.

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