NEW ZEALAND: Select avocado growers make good returns

by Gerard Hutching, New Zealand Farmer


Avocado growers who use Seeka Kiwifruit Industries as their packer have received much higher prices for their exports than others in the industry, the company says.


Grower returns per hectare through Tauranga-based Seeka for the 2014-15 season were $46,000 compared to the industry average of $21,000.


It was the second consecutive year Seeka growers received better than average orchard gate returns.


General manager grower services Simon Wells said while Seeka expected to attract more growers to use its services in coming seasons, it wanted to manage volumes to maintain high prices.


Returns for Seeka’s avocado growers in the 2014-15 season have been $16.03 per export tray with further payments projected of about 30c per export tray.


Seeka growers’ average yields rose from 12.3 tonnes per ha in 2013-14 to 12.9 tonnes per ha in 2014-15.


Wells said Seeka managed to achieve the better prices because it controlled the supply chain and focused only on high value markets such as Australia, Japan and the United States.


“We’ve managed the harvest into the market so we haven’t allowed volumes to discount prices. We’ve focused on retail programmes into Australia and they’ve returned handsomely this year,” Wells said.


Seeka processes about 7 per cent of  New Zealand’s avocado crop. The export season restarts in September; export returns are $93 million a year.


This year’s domestic Australian crop was down on projections and Seeka had managed supply with its growers to ensure it had sufficient fruit available for the Christmas/New Year period when prices were highest, Wells said.


SeekaFresh Manager Annmarie Lee said controlling the supply of fruit from orchards was the key to maximising returns for growers.


“We only supplied fruit to the market in response to our customers’ demand,” she said.


Seeka’s avocado business manager Dr Jonathan Dixon said in order to keep grower costs down and increase their returns, Seeka strip-picked. That meant it took all harvestable fruit from each of its growers at one time, rather than part-harvesting each orchard two or three times throughout the year, as is the case with other avocado companies.


All grower fruit went into a pool to mitigate pricing variations throughout the year. This season Seeka also continued with its late season premium for growers whose fruit was scheduled to be picked near the end of the season when – although prices in the market were higher – there was a greater risk of losses because fruit had spent longer on the trees.


New Zealand Avocado chief executive Jen Scoular said growers produced more than 7 million trays this year, a record volume, up from a previous high of 6.1m trays in 2011-12 and 43 per cent higher than the volume in 2013-14.


“Growers anticipated that with such high volumes, returns could be low, but the results coming in are very good, with some very positive orchard gate return results,” Scoular said.


She said as a result of poor returns from the Australian market in 2011-12, growers demanded that the industry and exporters invested in developing new markets.


This season premium avocados from New Zealand were launched at Asia Fruit in July 2014, and the collateral was used by exporters in Singapore, Japan, Korea and Thailand.


Source: New Zealand Farmer

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