This year's kiwifruit season is expected to set another record. Photo by Jamie Troughton/Dscribe Media Services
Kiwifruit orchard values have climbed as demand outstrips supply - with one property broker juggling 200 potential buyers.
Zespri figures show the latest Gold 3 kiwifruit licences have sold under the tender process for on average $550,000 per canopy hectare - $150,000 more than last year.
Quality gold kiwifruit orchardsthat were sold with fruit on the vines fetched $1.5m per canopy hectare compared with $1.3m six months ago.
Meanwhile, over the same timeframes, green kiwifruit orchards had jumped from $500,00 per canopy hectare to $600,000.
PGG Wrightson rural and lifestyle sales consultant Stan Robb said returns on gold kiwifruit orchards were up to 12 per cent while green orchards had returns of 10 per cent.
He said that meant more growers were holding on to their orchards.
"If you are an owner it's gone from very good to great. What has happened is a lot of people my age have thought about selling but they have been talked out of it by their accountant or solicitor."
Robb said listings were scarce and if an orchard came on to the market in a prime area like Te Puna, Te Puke or Paengaroa he had a dozen people who would be interested in buying it.
In his opinion, the prices of gold kiwifruit orchards were also set to take another upward swing as the price of licences had rocketed.
Property Brokers rural sales consultant Brett Ashworth said he had 200 buyers nationwide on his books that expressed an interest in kiwifruit orchards.
"That is across the board from small to large orchards and is an indication of the interest out there."
The lift in orchard prices was to be expected alongside the rising rate of kiwifruit licences.
Existing orchardists wanted to expand and there was also strong demand from entry-level orchardists and investors, he said.
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said if orchardists were looking to sell it made sense to put it to the market to extract maximum value.
"A lot of private deals have been done. That has happened with neighbour-to-neighbour or by private introduction but the market is so big now.
"The wise move is to go to the market and get the best money. People are looking for a return on their investment and kiwifruit is currently providing that."
Zespri chief grower industry and sustainability officer Carol Ward said it expected another record-breaking harvest.
This year it hoped to hit 177 million trays of kiwifruit compared to 157 million trays last year.
She said it been a positive start to the season and fruit was selling quickly on the back of strong demand.
However, Zespri was experiencing some headwinds.
"Freight costs and labour shortages are putting real pressure on the industry and the people in it. We're working hard as an industry to respond to the challenges and also working with the government on solutions to allow us to continue to deliver value for New Zealand in a way that is good for New Zealand."
However, larger markets like Europe had continued to grow while emerging markets like Vietnam had achieved double-digit growth year-on-year since 2007.
Meanwhile, she said growers set the price of licences through a closed-bid tender process.
There had been strong interest from growers for Zespri licences this year, with demand exceeding supply for all three pools.
Zespri was also looking at better understanding both the level of global demand and the ability to meet it, and would confirm arrangements for the 2022 licence process later this year, she said.
New Zealand Kiwifruit Growers Inc chief executive Colin Bond said the kiwifruit industry had rapid growth plans and projected good returns.
This was likely to attract new growers and expansions with existing growers and equity partnerships.
However, the consequence of increasing licence and land values was similar to the consequence of increasing house prices, he said.
''It makes it harder for new players to afford the entry cost."
This season had also been a success for growers but there had been challenges.
Border closures due to Covid-19 meant Working Holiday Visa numbers were down, resulting in a heavier reliance on Kiwis filling the roles.
"We continued our labour attraction strategies from previous years, based on getting good information on the work available to potential workers via collateral and a range of media, including a strong social media programme," Bond said.
"That was bolstered this year by the support from the Ministry of Social Development and Ministry for Primary Industries which made significant contributions to get unemployed Kiwis into the kiwifruit industry."