With the new season’s SunGold kiwifruit licensing tender due to open next month, expectations are that orchardist interest in the 750ha area being made available will be at least as strong as last year.
Last year’s SunGold allocation of planting rights averaged $290,000 a hectare, with a number of orchardists missing out on their desired allocation simply due to over demand for the popular planting option.
Snow Williams, Bayleys specialist rural and kiwifruit agent based in Te Puke says he would not be surprised to see the licence values at least match or even exceed last year’s values.
“There are people out there who have invested in green fields conversions to orchards, sitting on the rootstock and ready to go who will want to be in this year,” he said.
The confidence comes as demand for the high value SunGold fruit continues to grow strongly through both European and Asian markets and this month marks the first shipment of early fruit to those markets.
Last season SunGold fruit comprised 50 percent of the national crop for the first time, accounting for 74 million trays.
A big part of the fruit’s success is its ability to maintain a year round shelf presence, thanks to Zespri’s work with European growers ensuring a further 19 million trays can fill the shelves once New Zealand fruit supply has run out.
The fruit has proven to be a big hit with Chinese consumers accounting for almost 20 million trays worth of SunGold fruit sales last season. Consumers are flocking to the fruit on grounds of its colour, taste and health giving benefits becoming increasingly important to the growing middle class.
Snow says he is getting a continuous stream of interest in kiwifruit orchards from both investors and existing orchardists keen to expand their holdings and feeling confident about the sector’s future.
“And that interest is for both SunGold and for Green.”
He said despite banks getting tighter around financing conditions there were still funds available for orchard purchases.
“The beauty of the kiwifruit sector is that it has always valued land on its net return, rather than any potential capital gain, and this has stood it in good form- the numbers stack up well in terms of rate of return for both fruit varieties, particularly in this low interest rate environment.”
Even with the cost of a good Green orchard at about $500,000 a hectare, plus the licence cost and lost income until the orchard matures, the numbers still look good for SunGold conversion.
Orcharding costs for SunGold are proving similar to the $35,000-$40,000 a hectare for Green, while gross fruit income per hectare can be as high as $200,000 a hectare.
“I do not think there would be a higher earning crop per hectare in the country at present.”
He has had some strong sales in the district over recent months including a large 12.8 canopy hectare SunGold orchard converted to gold fruit in the past two years that sold for $13 million in the Edgecumbe district.
“We are also finding SunGold is opening up more opportunities for investors in areas outside the traditional growing district of Te Puke, to further afield through the Eastern Bay of Plenty, and as a crop, it is proving to be performing very well providing a valuable land use opportunity for that part of the country.”
He has had good interest in a 22ha property established with the latest growing and orchard technology in the district planted from a green-fields conversion.
The industry’s experience with the Psa outbreak in 2011 has left some valuable lessons around biosecurity which have done much to ensure today’s crop is less vulnerable.
A government-industry agreement on biosecurity has ensured the industry is working much more closely with the government on managing biosecurity threats, including the high profile brown marmorated stink bug which has had a devastating effect of fruit crops in Europe.
“The industry has bounced back in better shape than ever, and prospects are very positive. We also have the red kiwifruit variety due to be commercialised, offering another option in the future,” said Snow.