Apple crop healthy but profits eroded

While the Central Otago apple season is looking good, fruitgrowers say their profits are anything but.

Despite getting good money for their fruit in international markets, another season with a high New Zealand dollar means less money in their pockets.

Pipfruit New Zealand director and Teviot orchardist Stephen Darling said fruitgrowing had always been a demanding game but the added challenge of making a profit was proving difficult, just as it was for all exporters.

''The biggest single challenge facing us is the exchange rate. We're holding our own but it's very difficult.

''We have got good demand from our customers and we're selling at good prices but the return to the grower is not adequate ... it's not unfortunate, it's just wrong.

He likened the problem to a wage-earner suddenly being told their hourly rate was to be cut in half.

''Translate that to a wage-earner who's earning $15 an hour, then they come in to work and are told they will be paid $6 an hour.

He said the slack was often made up by orchardists working harder to try to make ends meet but that could not continue forever.

''People are working harder and harder and there will be a tipping point where people say they don't want to do this any more.

''It's extremely frustrating trying to maintain a business and employ staff and create a top-class premium food product and then have our rewards stifled 'cause of the exchange rate.''

Despite the low returns, growers were optimistic.

''You have to be 'cause there's always uncertain times ahead but we make the best of it regardless,'' Mr Darling said.

Cromwell orchardist Mark Jackson said while the exchange rate could be better, ''there's still money in it.

''We're used to it [the exchange rate] being the other way around ... it comes and goes''.

Earnscleugh orchardist Harry Roberts said reduced profits were ''just something you deal with'' and while it would be nice for exporters to have a low dollar, that would push up the price of imports such as petrol.

''So you have to weigh it up.''

Mr Darling said though profits were down, more markets were opening up.

India is one of those emerging markets with ''quite a lot sent last year and early indications that they want more''.

He said there was also good demand in European and Southeast Asian markets.

The recently opened Australian market, though, will probably not be attracting Otago apples this season, the third season the market has been open following a 90-year ban on New Zealand apples.

That ban and a long-running access dispute between the two countries culminated in a three-year legal dispute involving the World Trade Organisation.

It was settled on appeal, in New Zealand's favour, in November 2010.

Mr Darling said he was not aware of any Otago growers intending to send apples to Australia yet, though Hawkes Bay growers had been.

''I think the Australian programme went successfully in the last season. Not particularly high volumes [were sent] as people were just testing the processes but that has shown to work and now we're looking at sending more.''

As for the current Otago crop, Mr Darling said it was looking good.

''It's looking very promising. We've had a good run of fine weather which has been ideal for late fruit.''

He said some early pears had already been harvested while export apples would probably remain on the trees until next month.


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