The kiwifruit industry is battling to regain its $4 billion-plus sales credentials. Photo / Supplied
The kiwifruit industry is battling to regain its $4 billion-plus sales credentials. Photo / Supplied
Kiwifruit marketer Zespri has confirmed its net profit guidance of $155 million-$175m for this year, and in its first full forecast for the season, offered some brighter news for growers.
Forecast average per tray returns are now towards the top half of the exporter’s June guidance, with organic green andRubyRed fruit returns above the range.
However chairman Bruce Cameron said despite this season’s stronger pricing, per hectare returns were down across all fruit varieties except organic green, reflecting the season’s smaller crops and “pressures” some growers were experiencing.
Orchard inflation, squeezed returns and lower yields are causing some growers “financial pain”, their representative NZ Kiwifruit Growers Inc (NZKGI) has said.
Cameron said the new forecast reflected the 2023-2024 season’s “strong pricing” and improvements in fruit quality management, now tracking large in line with the 2021 season and much better than last season.
Zespri’s fruit quality costs and losses in FY23 meant the company had $534m less to return to growers in the 2022-2023 season.
The quality issues were attributed to a severe labour shortage in orchards and post-harvest operations and a string of extreme weather events.
A pan-industry action plan addressed the issues, which had the potential to damage the New Zealand’s premium kiwifruit brand in overseas markets if it continued.
Cameron’s update to Zespri’s 2800 New Zealand growers said managing inventory in a way that allowed the company to maintain strong run rates in the supply chain would be critical to avoiding quality issues late in the season.
NZKGI earlier this month reminded the industry that last season’s fruit quality problems largely emerged late in the season.
Bruce Cameron, Zespri chair. Photo / Supplied
Zespri’s annual shareholders’ meeting is today.
Zespri, which has the statutory right to export all New Zealand kiwifruit, except to Australia and is a $4 billion global sales business, is owned by present and past growers.
The new forecast is slightly better for green, or Hayward variety, growers, many of whom are reported to be not making any profit or incurring losses due to the challenging past two years.
The August forecast per tray for them is $8.10, compared with the June indicative forecast of $7.25-$8.50 per tray. The new range is $7.80-$8.60.
But the per hectare forecast is $55,683, compared with the June indicative range forecast of $50,000-$60,000.
For growers of Zespri’s global best-seller, the SunGold brand, the outlook has also brightened slightly with a per tray forecast of $11.50.
The forecast range is $11-$12 per tray, up from the June forecast of $10.50-$12. Per hectare, gold fruit growers are forecast to receive $130,908, with a new range of $125,000 to $137,000. The forecast in June was for $116,000-$133,000/ha.
Zespri organic green is forecast to deliver $11.20 per tray, compared with the June indicative prediction of $9.50-$11. Per hectare, this variety is forecast to return $49,956, compared with June’s $44,000-$51,000. The new range forecast for organic green is $48,000-$52,000.
The recently commercialised Zespri red fruit variety has a new forecast of $23.30 return per tray, compared with June’s prediction of $20.50-22.50.
Per hectare, the latest forecast for RubyRed brand is $36,044, compared with $32,000-$35,000 forecast in June. The new range is $22.80-$24.80.
Zespri’s corporate net profit after tax guidance of $155m-$175m includes growing licence release income. In FY23, net profit before tax was $331.2m compared with $505.1m in FY22.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
