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Horticultural opportunities expand.

Tags: Rural Rural Insight

Irrigation projects, growing export demand and higher income earners making healthier dietary choices are all contributing to a surge in New Zealand’s horticultural sector.

The strong growth promises to see fruit and vegetables knock dairying from its perch as the country’s largest primary export sector.

The industry has a declared goal of achieving $10 billion of earnings by 2020 and is well on track to make that goal.

While driven by some heavy hitters including kiwifruit, the sector is also increasingly turbocharged by growth in some lower profile but increasingly valuable produce lines including cherries, onions and pip fruit.

“While driven by some heavy hitters including kiwifruit, the sector is also increasingly turbocharged by growth in some lower profile but increasingly valuable produce lines.”

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.

Horticulture New Zealand chief executive Mike Chapman says New Zealand horticultural products not only has an important economic story to tell, but also a good provenance story as those resources continue to come under pressure globally.

At this year’s Horticultural conference in July he said the industry’s strong environmental sustainability, alongside New Zealand’s high standards of food safety and quality standards positioned this country well to capitalise on that growth.

Chapman says the industry is also acutely aware however of the need to protect what valuable horticultural soils remain as New Zealand faces the same pressures of urban population growth also responsible for driving the industry’s growth.

“The industry is acutely aware of the need to protect what valuable horticultural soils remain as New Zealand faces pressures of urban population.”

A report, Our Land 2018, released earlier this year highlighted the need to protect the country’s best soils.

Mike Chapman said the industry has been talking to government on the issue, particularly with respect to the Pukekohe district near Auckland. The district’s valuable soils have sustained market gardening for over 100 years, but are under greater risk than ever of being concreted over in houses.

“We believe the valuable growing soils, often termed elite soils, should be protected by central government policy. We can’t afford to keep losing these soils if we want to continue feeding New Zealanders their favourite fruits and vegetables.”

At the same time new fruit and vegetable varieties are opening up opportunities for regions that may not be suffering from as much urban creep, or necessarily have elite soils.

Zespri’s latest SunGold kiwifruit is proving capable of being grown well beyond the traditional sweet spot for the fruit around Te Puke, with strong interest from large green field developers and iwi to plant the crop on land well into the eastern Bay of Plenty region.

Bayleys Te Puke agent Snow Williams said the fruit’s ability to grow well on more challenging soils has opened up opportunities for investors, orchardists and communities well beyond Te Puke’s high value footprint.

“Areas like Edgecumbe and the eastern Bay of Plenty are starting to be recognised for their potential, and its great for iwi land owners in those areas too who have the land asset and want to earn more from it.”

To the south in Otago the region is enjoying a boom in stone fruit interest and investment, particularly for land suited to cherry growing.

In a sector traditionally known for its inter-generational ownership, interest from larger scale fruit growing companies has become stronger in recent months.

Major investments in the region have included a Hawke’s Bay company making significant investment in the Roxburgh district in a 200ha orchard, and the opening of a 1000t capacity packing facility at Bannockburn.

Bayleys Cromwell agent Gary Kirk said interest in the sector is widespread and the ability to grow the high value fruit in the region is increasing with the wider range of varieties capable of being planted beyond traditional growing zones.

He recently listed a 6ha mature cherry orchard and has received over 20 enquiries, while interest also remains strong in a 60ha block up for cherry conversion in the Tarras district, and another 200ha is to be planted in the Bendigo region.

He cautioned that investors in the cherry sector need to be aware it takes seven years to see a return, and highly profitable operators require a very good level of management skill to maximise their returns on a per hectare basis.

“There is also a considerable amount of homework being done by investors on the potential for the new varieties of apricots that have exceptional taste and shelf life compared to the earlier varieties.”

Mike Chapman said given New Zealand’s length and positioning the country offers some exciting opportunities for growers that belies New Zealand’s size, and the ability to supply northern hemisphere markets out of season is invaluable in markets demanding year round supply.

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