Apple growers hopeful for future

Seasonal workers from the Solomon Islands (from left) Lydia Kanainiu, with a New Zealand rose...
Seasonal workers from the Solomon Islands (from left) Lydia Kanainiu, with a New Zealand rose apple, Mashach Manangi, with a royal gala apple, Deborah Gwalu, with a Braeburn apple, Priscilla Mae, with Granny Smith apples, and Joseph Lebewa, with comice p
Amid stories of doom and gloom in the New Zealand apple industry, reporter Sarah Marquet talks with an optimistic grower and discovers the future of the industry is not so bleak.

The fruit industry is a fickle one - subject to nature, at the whim of picky consumers, reliant on exchange rates to keep growers in business and in need of high human input to ensure good fruit.

But to produce good fruit, growers need good money, and unless they can sell good fruit, they don't get good money. It seems like a vicious cycle.

During the past few seasons, New Zealand has struggled to sell apples in the traditional markets of Europe and North America.

Pipfruit New Zealand director and Teviot orchardist Stephen Darling says the problem is they are relatively mature markets, in which consumption is not lifting.

Coupled with that is the continuing economic crisis, meaning customers are less willing to purchase the premium fruit New Zealand growers are supplying, and the returns growers are seeing for their efforts are leaving many wondering why they are still in the industry.

Some have lobbied the Government for help, while others have cut down their trees or sold their orchards.

Mr Darling said during the past five years, many orchardists had got out of the game and, if that trend continued, the shock waves would resound through many sectors.

There is a "significant number of people engaged in apple production", not just those directly employed in the orchards and packhouses, but also the likes of truck drivers, engineers, consultants and those who in turn depend on them for business, like petrol stations and servicing companies.

However, Mr Darling thinks there are three key elements that, if addressed, will see the apple's return to profitability.

The "most urgent" element is the thing exporters have long lamented - the high New Zealand dollar.

"We are seeing a little bit of a response now, but it is still significantly over-valued."

Basically, while a high dollar is good for New Zealand consumers buying products from overseas - a $US200 pair of shoes for example will cost us about $NZ260 whereas 10 years ago it would have cost about $NZ400 - those on the export end of the spectrum are seeing the opposite.

They are receiving significantly less returns and can not raise prices to compensate for the exchange rate.

"If New Zealand wants an export sector there needs to be a return, or export producers simply won't have an income ... the high dollar has made it impossible and the [apple] sector is shrinking."

The second key element is the variety of apples grown.

Growers are constantly looking for new, more desirable varieties but a tree can take about 10 years to be mature enough to produce a good crop so, if the wrong variety is chosen, there can be devastating consequences.

Growers currently pay levies, of which about $1.2 million goes into a plant-breeding research programme, which aims to provide varieties for the future.

Such research has also seen more trees able to be planted per hectare and the removal of low-producing varieties.

Production in Otago has effectively doubled during the past 10 years, despite fewer hectares of trees planted.

The third element is to increase demand in new markets such as China, India and southeast Asia as those economies are growing. There are growing populations in those countries, and wealthy consumers.

But on top of that, Mr Darling says the Asian markets have an increasing interest in safe food products and that is where New Zealand's advantage lies.

For a start, he says this country has a reputation for being trustworthy and reliable and inputs into the growing process, such as sprays, are carefully monitored.

"New Zealand is a world leader in producing ultra-low-residue fruit."

A three-year Pipfruit New Zealand-initiated pilot programme, with New Zealand Trade and Enterprise, has just ended.

Named Apple Futures, it sought to validate orchard and packhouse practices and verify what growers already knew - that their fruit really was top quality.

Countries that New Zealand exports to have set levels of residue allowed on the fruit, but the Apple Futures programme aimed to have all fruit with levels at 10% of the allowable European Union level.

It involved altering orchard practices and switching to organic sprays, where possible, but Mr Darling said it was a great success and the result was something New Zealand should be proud of.

The programme also helps when it comes to pest control and quarantine measures.

Because New Zealand fruit trees have been introduced from Europe, this country has many of the same pests as there and therefore, relatively relaxed quarantine regulations.

Asian markets, on the other hand, have different pests and, therefore, different issues around quarantine, so it is essential for growers to be able to show necessary measures have been taken.

For the past two to three seasons, New Zealand exporters have been building up Asian demand for their apples and Mr Darling says China, the world's largest producer of apples, is now a "bright spot" for our exporters where they are sending premier apples, particularly large, sweet, red apples like the high-colour royal gala, and getting good prices in return.

"The market there is beginning to recognise our apples as desirable."

Last season, Asian markets accounted for almost 30% of apple exports.

However, as with summer fruit and wine, the apple industry's biggest competitor is Chile. It produces more fruit than this country and has lower production costs.

What are New Zealand apple growers doing to compensate?

Mr Darling says they are "trying very hard" to stay at the top end of the market, which means sending only the best fruit.

And Central Otago apple growers have an extra weapon - the Central Otago fruit brand.

Though in its infancy, the brand has already seen increased returns for cherries and apricots and it is hoped apples can ride on their coat-tails.

The branding project aims to connect the consumer with the grower and tell the unique story of Central Otago, its growers, and its fruit.

Mr Darling says it is a very important strategy and thinks it will sit well with the region's emerging-market consumers.

"If we define and adhere to quality and attach values that define our unique growing region, then I believe that we can get better returns."

- sarah.marquet@odt.co.nz

The current season
The first half of the pipfruit season, the harvest, has been completed, with varying results across the country.

Pipfruit New Zealand director and Teviot orchardist Stephen Darling said in Otago, there were "ideal" picking conditions - a warm, dry autumn.

However, growers in other regions, specifically Nelson and the Hawkes Bay, faced a lot of wet weather.

In Otago, he said the volume of fruit harvested was slightly lower than last year but the quality was much better.

"We want a nice colour, we want good crunchiness and we want good, sugary sweetness."

A Pipfruit New Zealand crop forecast, completed this week, has indicated that the Braeburn export crop will be less than 3 million cases (54,000 tonnes) in 2012 which represents a reduction of 27% on last year's crop of more than 4 million cases.

Mr Darling said that was a significant drop but the figures for Otago are only slightly down on last year and close to the five-year average.

"Otago has not been affected to the same extent as the rest of New Zealand.

I believe it is directly related to better growing conditions in summer.

"We were very fortunate in December and January to get sun, when a lot of the rest of New Zealand was getting quite a lot of wet conditions during that early growing period."

Final statistics for this season will not be available until the end of the year.

 

 

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