Despite a drop in bearing acreage, New Zealand apple production and exports in 2023-24 will increase following last year’s rocky growing season, according to a new USDA report.
New Zealand’s harvest season starts in January and finishes in June, with peak harvest for apples from March to May.
The USDA report forecasts New Zealand apple production at 480,000 metric tons, up from 440,000 metric tons in 2022-23.
“This represents a predicted recovery due to the El Niño weather pattern, availability of seasonal labor, and implementation of farm system innovations,” the report said.
New Zealand’s planted apple area in the 2023-24 market year is forecast at 22,733 acres, a substantial drop from 27,100 acres at the start of the 2022-23 marketing year. Lower acreage is a result of the impacts of Cyclone Gabrielle, which brought large-scale floodwaters, silt, debris, wind and surface flooding to the primary apple-growing regions of Hawkes Bay and Gisborne, according to the report.
“With the current replacement of damaged orchards and increasing interest rates on financial lending, farm gate returns to growers will be a substantial factor in selecting future varieties,” the report said. “As a result, the industry anticipates diminishing hectares for older varieties such as braeburn in favor of newer varieties such as Rockit.”
Export promise
New Zealand apple exports are projected at 330,000 metric tons in 2023-24, up from 309,084 metric tons last season.
“As a result of New Zealand’s counter-seasonal production to other countries, market demand is forecasted to stay strong, with export priorities noticeably focusing on Asian markets such as Vietnam, Thailand, and China,” the report said. “In the first quarter of the year, India has become a substantial growth market, being the second-largest destination for New Zealand from January to March.”
Last season, Cyclone Gabrielle slowed apple exports, with offshore shipments the lowest since the 2012-13 season.
Financial pressure
The report said growers in the Hawkes Bay and Gisborne regions are undergoing the decision process to salvage or repair damaged orchards. The estimated cost of reinstating apple and pear orchards is significant, at between $108,000 to $150,000 per hectare for trees and planting, support structures, irrigation systems and ground preparation, according to the report.
“The lead time to obtain apple tree stock can be two to three years, with a further lead time before trees reach maturity,” the report said. “There remains uncertainty around the number of hectares that may not be reinstated in the future.”
In addition, the nation’s total bank loans to horticulture operations were $4.7 billion as of February 2024, the report said.
“Since 2017, the total value of loans to horticultural growers has increased at a compounding annual growth rate (CAGR) of 11.5% per year, compared to dairy, livestock, and grain farmer loans combined, which have decreased at a CAGR of -0.6% per year,” the report said. Of loans to the agriculture sector, 84% are on floating interest rates, resulting in higher costs for growers as interest rates have remained elevated.
“The impact of this in the remainder of the marketing year is farm operations will utilize less capital for new purchases, improvements and innovations as businesses prioritize servicing debt,” the report said.
Related link: View the USDA report
