Demand opens up land-use options

The highest earning organic crop is kiwifruit, which accounts for about 20 per cent of all organic exported produce.

With two out of three Kiwis now buying organic products during their shopping trips, prospects for food producers in the sector are looking ever more promising.

An Organic Aotearoa market report has highlighted the strong shift among consumers to organic shopping, and the growth in a market that domestically is now worth quarter-of-a-billion dollars, having grown 45per cent in four years.

The surge in consumer interest is now being reflected by interest among farmers and investors in properties suitable for conversion to organics, or already holding organic certification.

Of the $240 million of organic exports last year, fresh fruit and vegetables remain the largest by value, accounting for $108 million of that.

Bayleys national country manager Simon Anderson said the wide spectrum of organic production in New Zealand has meant every aspect of protein, fruit and vegetable production is offering opportunities that deliver strong returns to those prepared to commit to the sector.

"The highest earning organic crop is kiwifruit, which accounts for about 20per cent of all organic exported produce. Of that, the SunGold organic fruit are the premium fruit of the crop, with insufficient supply to meet demand."

The growth experienced in consumer demand locally reflects what is also happening offshore.

The Organics Aotearoa New Zealand market report highlighted the 346per cent increase in food sales globally since 2000, with total sales now accounting for US$80 billion of value.

In New Zealand the area classed as organics is 74,000ha, about 0.5 per cent of the farmed area, averaging $33,000 a hectare in gross export earnings last year.

Organics Aotearoa chief executive Brendan Hoare said his early days in landscape design extended into helping "hapless hippies" who had moved to the country wanting a better life by farming a small block organically.

"We used to end up helping them avoid divorce by doing a management plan for their block.

There was, and sometimes still is, a bit of a disconnect there between what people think organics involved, and the reality of making an organic operation work, and pay its way."

However in the past 20 years the infrastructure to support the sector has grown. Where once growers may have had to make their own organic fertiliser for example, certified manufacturers now provide a range of products and treatments.

Interest in organics as a land use option for dairying has also lifted in recent months thanks to Fonterra's announcement it would pay North Island organic suppliers a whopping $9.20/kg milk solids, more than double what conventional suppliers were anticipating for the season.

The global market for organic dairy products is projected to grow by 12 per cent a year, according to the Organics Aotearoa NZ 2016 organic sector report.

Meanwhile the Organic Dairy Hub Co-operative (Dairy Hub NZ) is forecasting payment of $8/kg MS for the coming season to farmers supplying it with milk.