New Zealand fresh apple exports expected to rise, but labor limits growth

New Zealand’s apple production and exports will rise modestly in the marketing year 2021-2022, a new USDA report says.

However, a labor shortage and storms that delayed harvest in the Hawke’s Bay region have reduced crop expectations, according to the report.

New Zealand apple production is forecast at 553,000 metric tons, 3% higher than last season but 6% below the record crop of the 2019-2020 season. 

The report said the export estimate for New Zealand apples is 375,000 metric tons, up 5% from last season but down 7% from the record volume exported two years ago.

Even so, crop production and exports will remain far below levels previously expected as a result of continued shortages of harvest labor. 

“The combination of reduced labor due to international border closures, as well as a slowdown in picking and packing because of COVID-19 outbreaks amongst staff, is resulting in some lower-value apple orchard blocks not being harvested,” the report said. “Also, strong rainfall in the Hawke’s Bay delayed the start of harvesting, and there is not expected to be sufficient labor to catch up, which will also put pressure on production and export numbers.”

The report said 2022 planted area in New Zealand is 27,181 acres, unchanged from 2021.

Limits to growth

Labor shortages and supply chain constraints have halted the trend of increasing planted area in New Zealand, the USDA report said. “Although overall area is not expected to expand, there will continue to be replacement of old blocks with newer, higher-yielding varieties, and with new production and trellising systems,” the report said. Older varieties such as braeburns are being replaced by sweeter varieties with more red color that are attractive to Asian markets.

Apple exports are impacted by shipping delays, the report said, including container availability and delayed shipping schedules. 

“However, the fact that the majority of apples leave from the Napier port, which is a small port relatively focused on apples, has somewhat helped mitigate the impact,” the report said.

By value, top export markets for New Zealand apples in 2021 were the European Union (12%), China (10%), Vietnam (9%), United Kingdom (9%), Taiwan (8%), India (8%) and the U.S. (7%), Thailand (6%), United Arab Emirates (5%), Russia (5%), and other (21%).

The total value of U.S. imports of New Zealand apples totaled $50.7 million in 2021, off from $55.9 million in 2020. In 2021, the U.S. reported imports of New Zealand apples from March to November, with peak imports in June and July.

The USDA report said the Russian invasion of Ukraine may have a small but noticeable impact on New Zealand’s apple exports. 

“Russia typically accounts for only about 5% of New Zealand’s exports,” the report said. However, this market was largely for less than premium quality fruit, so will have an impact on this segment of exports. Also, there is concern that fewer exports to Russia from competitors such as Chile and South Africa will also increase competition in other markets, according to the report.