Fresh produce growers across New Zealand are bearing the brunt of rough weather while consumers are taking on increasing costs at the supermarket.
Fresh produce supplier Leaderbrand said rain was expected in Gisborne this summer but nobody expected the entire North Island and farms in Pukekohe and Matamata to be hit with so much rain.
Leaderbrand chief executive Richard Burke said the company’s South Island farm had produced “plenty of broccoli, courgettes and other produce” that will be freighted to the North Island.
“Things are bad right now, but it can’t get any worse.”
He added: “We’re in the game of supplying produce to New Zealanders and it’s frustrating when we can’t do it to the standard that we want. We know Kiwis are frustrated and disappointed, and so are we.”
Sweet corn, watermelon, and lettuce have been hit hardest this summer according to Burke.
“We’re meant to be getting sort of 26 to 32 degrees most days, and we’ve had none of that. In fact, we’ve had pretty much rain since New Year. So it’s just the way there’s a challenge at the moment, but it will change. I just don’t know when.”
However it isn’t all doom and gloom for consumers. Leaderbrand expects sweet corn supplies to bounce back over the next two to three weeks.
For shoppers looking for watermelons he said wet weather and cooler climates mean a further delay could be expected.
“The problem with watermelons is that they really need a bit of heat. You’ll see watermelons come down slowly at the beginning of February.”
Lettuce prices are more challenging to stabilise.
Burke said the bulky crop costs more to freight around the country as fewer heads can be packed into a single freight container. Along with rising freight costs and temperamental growing conditions, Burke said prices are likely to fluctuate for lettuce.
“Lettuce doesn’t like a lot of rain, so you get some decay and your yield drops.”
“It’s expensive to harvest because of the labour content. It’s expensive to cool and it’s expensive to freight. And all of those costs have taken quite a rise, which is why lettuce pricing has increased and supply has has decreased,” Burke said.
Hinemoa Quality Producers’ Chris Nicholson said November’s record rainfall hit the business especially hard.
“Generally, we get 1300 millimetres of rain a year in our area. I think we had something like 1570 or 1600, so another 300ml on top of what we would normally get.”
He added: “We just couldn’t harvest so to counteract that we’ve actually gone to a different area that’s got a different soil type so we can actually harvest when the ground conditions are too wet with our home block.”
Nicholson’s Pukekawa family-owned farm specialises in onions and potatoes and found multiple factors led to the unexpectedly low supply of fresh produce this summer.
“The cost of fertiliser has doubled in one year and the price of the chemicals have gone up between 15 and 30 per cent as well,” Nicholson said. “With a labour shortage as well, we’ve got to pay staff well above the pay rate to keep them.”
Nicholson said he doesn’t think supermarket prices have reflected rising costs for growers.
“It’s getting harder and harder. There’s a lot of growers because of the red tape and all the extra paperwork we have to do on the growing side of it, can’t afford it so they decided to give up.”
Burke agreed that finding labour has been difficult for growers.
“When the unemployment rate is as low as it is, you’ve got to expect that.”
He added: “We don’t get to pass on our cost price. There’s plenty of times of the year, we’re selling broccoli for less than what it costs us because we need to move the volume and we’ve got to make money out of the scale and being efficient.”
Burke said growers face high production costs so focus only produce that will sell.
“The problem is as soon as you have any adverse weather which reduces the yield, you’re going to under-supply the market which means the price is going to drive higher.”
Burke said a large portion of lettuce goes to the food service industry, driving supermarket prices even higher.
“They can’t afford to run out of product which impacts the fresh lettuce price, because people will make decisions about whether to sell it to process or to sell it on the domestic market.”
Consumer NZ’s Jessica Walker said the international market affected fresh produce costs for Kiwis at home.
“A lot of the fruit and vegetables grown in New Zealand are exported to international markets where growers can secure a better price.”
She said kiwifruit, apples and avocados were popular items in Aotearoa making the local market reliant on imported fruit and vegetables.
“When there is volatility in the market or increased fuel and shipping costs, local shoppers bear the brunt of those costs.
“Shopping for a healthy and balanced meal has never been so expensive and for many households, it’s simply not possible.”
Foodstuffs also said weather events such as Cyclone Hale were a major contributor to growing fresh produce prices.
“Domestically, input cost pressures are continuing for suppliers who are facing higher costs to grow, pick and pack produce for market, with adverse weather events still the wild card this year,” the supermarket company said.
“We’ve had to import more fresh produce than in previous years because we couldn’t buy it here in New Zealand,” Foodstuffs NZ Managing Director Chris Quin said.
“Overall, we’ve been hearing a lot about global commodity prices coming off their peak, while still at historical highs, and inflation pressures are easing in both the US and in the UK.”
“The question is whether inflation has peaked or whether there’s still some way to go,” he added.
Foodstuffs said the tight labour market, increasing wages, weaker NZ dollar, increasing fertiliser costs for suppliers, and the upcoming end to fuel subsidies were also influencing prices.
Quin was unsure when cost pressures will ease but is optimistic prices will become more affordable for Kiwi households.
“Given the usual price change moratorium over the holiday period and the resulting lower volume of price changes, it’s still not clear whether cost pressures have started easing for suppliers and how this will impact food prices into 2023.”
Quin said Foodstuffs will “stay laser-focused on helping customers fight inflation and find value within their household budgets this year.”
Walker said a lack of competition across local supermarkets adds to inflated prices.
“The duopoly also plays a role. A lack of competition in the supermarket sector leads to higher prices for consumers.”
Burke said growers are “asking for patience” from Kiwis.
“We’re really feeling the pressure of being able to get good values on the market and we’re disappointed we haven’t yet but we’re certainly pulling out all stops.”
For the future of Hinemoa, he said “We’re in a unique position where people have to eat, so we’ll survive.”
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