Horticulture is heading towards being a $9.5 billion business over the next year as one of the fastest growing primary industries despite serious headwinds. The receipts are being added up for the year ending June, but kiwifruit, apple, stone fruit, potato and other growers are expected to have earned about $9.2b from exports. Among the shining lights, kiwifruit is generating $4.3b in export revenue, up from $3.9b the year before. However, about 800 growers and industry people at the Horticulture NZ conference in Wellington on Tuesday were warned that overall inflation, including higher fuel, fertiliser and transport costs, was putting pressure on horticulture profitability. Horticulture NZ chief executive Kate Scott said the past year had been one of change, achievement and challenge. "Horticulture is one of NZ’s fastest growing primary industries. The latest [MPI primary industries] report forecasts export revenue to reach $9.2b at the end of June this year. That is more than a milestone — it is proof of what growers can achieve through sustained innovation, investment and hard work.’’ But export success did not automatically translate to strong farmgate returns, she said. "The cost of fuel, fertiliser, energy, labour and freight continue to squeeze margins. We do not, however, have to accept those pressures as inevitable.’’ She said the organisation’s election manifesto had set out key sector priorities to give growers confidence to continue investing in their businesses. They include regional infrastructure investment for reliable energy, shipping and port connections, water security, less red tape, stronger biosecurity, access to crop protection and a skilled workforce. [Missing Credit]Horticulture NZ chief executive Kate Scott. Photo: Horticulture NZ "We need a fair and competitive grocery market so growers can capture value.’’ Minister for Agriculture Todd McClay said horticulture growers had a lot to celebrate as a major contributor to the rural economy and employers of 75,000 workers throughout a season. “Your sector is delivering for NZ and it’s also a story of amazing growth. At the end of June 2025 horticulture produced almost $8.9b worth of exports. That was up almost 25% on the previous year and that is expected to grow to almost $9.5b over the course of next year.’’ He said the government was supporting the sector to be more productive through trade deals in an effort to double the value of all exports over 10 years. "Over the next year the [primary] sector will have new records of $64b and forecast to hit $70b worth of exports by 2030. Of that, horticulture will be around $11b.’’ The horticulture sectors generating this growth include kiwifruit, apples, pears and wine. Mr McClay said new free trade agreements with countries such as India, European Union, United Kingdom and the United Arab Emirates, and tariff reductions, were opening new doors. "Incidentally, although we are facing tariff rates into the United States and changing tariff rates and uncertainty, our exports to the US have gone up by 4% by value. And, of course, India has been a real success for NZ. It will be extremely important to our economy in the years to come.’’ He said free trade would likely be as important to India as China in the next 10 years and while two-way trade was only a “few billion dollars’’ at this stage, that would grow quickly. The India FTA has 57% of exports tariff free on day one, growing to more than 80% when fully enforced. Westpac economist Satish Ranchhod said the outlook appeared optimistic for horticulture, but there was a backdrop of financial pressures. He said consumers were looking more closely at their grocery spending because of fuel price rises. Increased fixed costs included insurance and government charges, such as council rates more than doubling since 2010. Inflation rising to 3% was the major concern for households and “rippling’’ through businesses, he said. Ministry of Foreign Affairs and Trade’s trade and economic deputy secretary Vangelis Vitalis said the protectionism “jungle’’ from tariffs, trade restrictions and uncertainty was growing back. The uncertainty also offered opportunity for growers as the preferred source of safe and sustainable food, while tariffs were being reduced in free trade agreements, he said. An Aotearoa Horticulture Action Plan (AHAP) report released at the conference showed progress was being made on big issues for growers. The plan aims to double horticulture’s farmgate value by 2035 through growing food sustainably, lifting value, strengthening Māori horticulture, using science and knowledge, and increasing people skills. The optimism was based on work to improve water security, reduce red tape, open up markets and Māori opportunities, strengthen the workforce and increase science and innovation. [Missing Credit]Aotearoa Horticulture Action Plan chairman Andrew Gibbs. Photo: Horticulture NZ AHAP chairman Andrew Gibbs said the next job was to build on this to boost farmgate returns. Horticulture organisations were aligning with the plan, he said. “The biggest constraint we face is not ideas, it is capital. Bridging the gap between early-stage initiatives and investment-ready projects will be critical if we are to move from momentum to scale.” The report said growers continue to operate in a tough environment, including weather events, cost pressures, labour constraints and uncertain markets. Horticulture NZ paid for flights and accomodation to the conference.
