Horticulture Market Update

In this sector market update, we focus on the horticulture sector with insight on market conditions from Bayleys Bay of Plenty Country Manager Matt Clutterbuck.

Kiwifruit continues to lead the way in the horticultural sector, with strong activity in the market fueled by rising returns.

Average net returns of 12 percent are being achieved for green and gold varietals, and promising red kiwifruit is now hitting the shelves.

Coupled with historically low interest rates, this has led to buoyant interest from local growers, syndicates, iwi groups and investors – all looking for resilient cash returns from the kiwifruit sector.

Offshore markets in Japan and China are both seeing stronger retail uptake of kiwifruit compared with this time last year, as healthy fruit remains a key buyer choice post-COVID.

The kiwifruit season in Europe has also started positively, with Gold3 (marketed as SunGold) kiwifruit sales commencing late-April.

The demand for both Gold3 and Red licenses continues to outstrip the available supply. There were more than twice the number of hectares bid on to the available licenses this year, resulting in record price at this year’s tender. The 2021 minimum accepted bid for Gold3 was $525,000 per hectare – 39 percent up on 2020 prices; organic Gold3 was $287,826 per hectare and Red was $58,000 per hectare.

As well as soaring demand for licenses, there’s high demand for orchards and bare land for purchase, with some top end Gold3 orchards achieving in excess of $1,600,000 per hectare and Green Hayward $700,000 per hectare.

The demand for orchards throughout the Bay of Plenty remains strong, with continued expansion in other regions such as Northland and Gisborne as buyers search to secure suitable land.

The Far North has experienced further change in land use – away from traditional dairy – for avocado orchards (where land has access to water consent). Interest is coming from individual growers and corporate operators.

Growers are now regularly aiming for circa-15-20 tonnes/ha (3,000-3,500 trays/ha), with some growers looking to push the boundaries beyond 30 tonnes/ha.

In the three months to March 2021, REINZ figures showed that horticultural properties accounted for 11 percent of all rural sales.


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