11 Rural water in private hands Vol 20 No 31, August 29, 2022
farmersweekly.co.nz
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Rotten fruit stains brand The fruit we are sending to market this year is the worst since the quality and taste issues we faced with Hort 16A in the early 2000s.
Richard Rennie
Z
richard.rennie@globalhq.co.nz
ESPRI’s reputation for high-quality fruit supply is under threat with spoiled fruit on shelves offshore and Zespri’s CEO issuing a blunt observation that the produce is the worst seen in 20 years. Growers at Zespri’s AGM were left under no illusions their income is going to take a severe hit this season as a result of quality issues that CEO Dan Mathieson said have left many of Zespri’s hard-won customers genuinely upset. “The fruit we are sending to market this year is the worst since the quality and taste issues we faced with Hort 16A in the early 2000s,” he said. That fruit was so bland, Zespri’s Asian GM said he could not sell the “potatoes” being sent to him. Mathieson cited fruit that was soft, stained and rotten, all failing to fulfil Zespri’s long-held brand promise of delivering premium quality fruit. Chinese social media has also started to fire up on fruit quality there. Quality issues had been anticipated this year as a result of labour shortages, but this is now described by Mathieson as being at the “worst end”. Growers have been warned to brace for the brunt of the quality hit, with this year’s crop loss forecast to slice off $2.80 a tray for SunGold kiwifruit compared to the $1.68 hit last year, itself labelled a poor one for quality. Based on estimated industry production of 100 million trays of SunGold, losses in this high-value
Dan Mathieson Zespri
POTATOES: Zespri chief executive Dan Mathieson says the fruit being sent to market this season is the worst since the early 2000s, which were described by Zespri’s Asian GM as ‘potatoes’.
fruit alone are $280 million. Green’s $1.95 loss per tray on 70 million trays adds a further $136m, to total loss costs of $416m, almost double last year’s combined fruit losses. The eye-watering loss figures are set to leave as many as 50% of Green growers in either a breakeven or a loss situation. Even some SunGold growers receiving about $11 a tray will face a tight season. Those who have borrowed heavily for their $800,000/ha
licences have faced a doubling of interest rates in the past year, and as much as a 20% increase in orchard costs. Behind the scenes, fruit quality controllers have been scrambling to pull fruit out of storage, regrade and repack prior to export to avoid pushing spoilt product to market. Reports are circulating of growers experiencing up to 50% of their crop being rejected at this re-grading point. Mathieson called for the
industry to fix the problem fast, and the first area for examination is around licence release. Licence income from SunGold, which reached a peak of near $800,000/ha this season, has proven a valuable income source for the marketer, totalling $430m in 2021. Zespri expects to announce changes to the licence allocation method and the number of hectares available ahead of the 2023 licence release. Borrowing to service loans for
SunGold licences has contributed significantly to total horticultural sector debt. Lending by the banking sector to horticulture has grown 30% over the past two years to $6.8 billion this April, and this has come as overall primary sector lending declines. Industry insiders are citing the shortages in labour supply as the key reason for poor quality fruit outcome, while a rise in Psa infection has been cited as a lesser cause. Mathieson acknowledged that the pandemic and resulting labour shortage exacerbated the tension between meeting demand and maintaining a high value for the fruit. Growers have reported poor quality harvesting techniques from contracted picking gangs, resulting in fruit being “rained” off vines, causing damage that only manifests as fruit ripens, either in cool storage or on the shelf. Mathieson acknowledged that labour problems have also lead to a shortage of people to do proper quality checks on packing lines. “This has put immense pressure on growers and post-harvest, and I know it has been an incredibly hard time for you.”
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