Lower dollar gives fillip to pipfruit growers' prospects

The nation's pipfruit growers can expect continuing losses this year but at a lower level than last season, agricultural economists say.

The Ministry of Agriculture and Forestry (MAF) said today the outlook for 2006 was "slightly more optimistic" than last year.

"This relative improvement in outlook over last year can be attributed to a more favourable exchange rate, a smaller national crop to export, and better co-ordination from orchard to market," MAF senior policy analyst and report author Nick Dalgety said.

He noted that growers were generally more optimistic than industry representatives, with those in Hawke's Bay forecasting "break-even" financial results, while Nelson growers expected a small loss.

Mr Dalgety said that industry representatives in both regions did not believe market conditions for 2006 had improved sufficiently to justify such forecasts.

The exchange rate for the New Zealand dollar against the euro had dropped 10 per cent since growers were interviewed in January and "if this rate is maintained, grower returns this season should improve on those predicted in the report".

The downturn in 2005 meant a harsh year for orchardists, following a year of losses in 2004, he said.

"A number of growers quit the industry, and more can be expected to follow if returns are poor again in 2006," he said.

The area planted in pipfruit nationally has fallen 13 per cent since 2005, reducing the volume of fruit available for export in 2006.

- NZPA