Good year for apples but not everything looks rosy

Press, 12 July 1985, Page 22

Good year for apples but not everything looks rosy

Canterbury apple orchardists have just experienced a highly successful year financially, but Mr Alister Malcolm, retiring Canterbury director of the Fruitgrowers Federation, has warned things could change. “Not everything looks rosy for apple growers in the coming years because the industry’s structure is changing,” said Mr Malcolm.

The Government’s proposal to change funding for producer boards would reduce the ability of the Apple and Pear Board to make a profit because of the high costs of borrowing money on the open market, said Mr Malcolm.

The Ministers of Agriculture and Finance recently suggested that stabilisation funding to producer boards through the Reserve Bank be abolished. A reduction in Reserve Bank support would affect the whole pipfruit industry and erode the financial position of individual growers, said Mr Malcolm.

Growers could not expect a substantial initial payment for fruit early in the season — last season they were paid 98 per cent of the average price one week after their fruit was submitted to the board. It is

normally 90 per cent. “There is every indication that the initial payment will be reduced considerably and subsequent payments spread over a longer time. “Growers could end up having to find finance for six months of the selling season as well as the normal growing season. “This will add significantly to the overheads of growers who could find up to a third of their income delayed for three or four months,” he said. A reduction in Government support would result in a much less stable fruitgrowing industry and may open it to violent fluctuations, said Mr Malcolm.

The 1984-85 season could be a peak year financially for the industry, which had suffered major financial losses in the early 19705. Mr Malcolm warned that growers should not budget new plantings on the 1984-85 season’s returns.

The tougher restrictions on finance would also prevent growers from expanding at the same fast pace of recent years, an effect which Mr Malcolm conceded was not necessarily a bad thing when considering the big increase in production expected during the next few years. Because of the likelihood of apple exports from Can-

terbury starting in 1987 or 1988, growers now have to consider building export packing sheds and associated equipment, which will involve considerable amounts of money, said Mr Malcolm.

South African growers were now pre-cooling export apples before packaging and New Zealand was likely to follow suit, said Mr Malcolm. This would mean extra investment in precooling facilities and the increasing quantities of export apples would necessitiate bigger handling facilities.

Looking at the stonefruit industry, Mr Malcolm (who is chairman of the stonefruit sector of the Fruitgrowers Federation and chairman of the stonefruit export council) said the industry should set up a fiveyear market development plan.

In the last two years, Australia had taken more than 75 per cent of New Zealand’s stonefruit exports, but with accelerated plantings it would be most unlikely that Australia would take 75 per cent of the projected exports in 1988 at -a satisfactory price.

There was a need for more commercial shipments using controlled atmosphere containers to distant markets, said Mr Malcolm. The industry at present had a fixation with short-term profits from supplying the Australian market.

Mr Malcolm expected tighter requirements to be introduced for the pre-cool-ing, storage and shipment or stonefruit. Some airfreighted containerised fruit was generally arriving in excellent condition.

It was likely that all stonefruit exports should go by container with the exception of spot consignments to fill market gaps and long distance markets. “We cannot continue to allow airfreight stonefruit to be broken down off pallets and mishandled, when the fruit was sometimes left sitting outside.

Another problem with airfreighting fruit occurred during transit in temperatures of 35 degrees or more. The medium to long-term future for cherry exports was excellent and the industry was 95 per cent sure of gaining access to Japan, said Mr Malcolm.

Apricots were facing good prospects provided sufficient quantities of the right quality fruit could be produced. Apricot production in the United States had halved in the last 10 years and demand was stronger.

Nectarines would continue to play a major part in the industry, but timing of varieties and production would become more critical. Mr Malcolm said he did not advise big new plantings of nectarines which ripen in January. Nectarines ripening from late February onwards

appeared to have the best prospects. Because no high quality, late-maturing nectarine variety was available, Mr Malcolm suggested the industry finance a joint venture with the D.S.I.R. to produce a suitable variety. Peaches had historically been the backbone of the industry, but Mr Malcolm cautioned growers against making widespread plantings. Market prospects were more limited than nectarines and the shorter storage life of peaches created problems when transported in controlled atmosphere containers.

Peach varieties ripening from late February onwards appeared to have the best prospects. The stonefruit industry’s turnover in 1985 was $2B million to $3O million and the fruit was provided by about 1300 growers.

The successful season for the industry illustrated the benefit of discipline and highlighted the continuing need for industry controls, Exports were estimated to have totalled 440,000 trays, slightly lower than pre-season estimates, but fruit quality and size were excellent. In 1985-86, the industry hopes to export 600,000 to 900,000 trays. “This could lead to stonefruit becoming the third major horticultural crop by the 19905, after apples and kiwifruit, exported from New Zealand,” said Mr Malcolm.