Kiwi orchard prices hit new heights as Zespri expands SunGold plantings
Prices for kiwifruit orchards have hit new highs, with a handful of sales this week in Bay of Plenty over the $1 million per hectare mark.
Stan Robb of PGG Wrightson Real Estate in Te Puke said properties were in such demand they were snapped up in days.
In June the region was abuzz with news of the first orchards to break through the $1m per ha ceiling. Those orchards had a full crop on them, so the new owners could make an immediate income, unlike the recent ones.
Values have soared since 2014 when gold orchards were worth about $400,000 per hectare. Back in 2010, during the Psa crisis, it was almost impossible to sell orchards.
The latest sales come as Zespri on Thursday announced an acceleration in its SunGold planting programme to satisfy global demand.
The Zespri board has decided to ramp up SunGold plantings through to 2022 by 3500 ha. It already has a programme to release 400 ha a year of licences until 2020 but has decided to add 300 ha a year through a closed tender bid and extend the release until 2022.
A spokesman described the plans as "ambitious" but needed to meet global demand.
Robb said this week's sales represented a $150,000 per canopy hectare leap in the price of SunGold land in the past three months.
"In the past few days we have sold four Paengaroa properties, ranging from 3.54 to 6.78 ha, at between $1.05m and $1.076m per canopy hectare. Two substantially larger properties are set to change hands imminently at similar prices, at or around the same $1m per canopy hectare mark."
Robb said the June buyers bought fruit worth about $150,000 per hectare, unlike now when flowering was about to start.
Kiwifruit growers were poised at an "exciting phase" for the industry, New Zealand Kiwifruit Growers Incorporated (NZKGI) said.
NZKGI chairman Doug Brown said the past two years of SunGold licence release had been heavily oversubscribed and the announcement would go some way to satisfying the demand, particularly given the commitment to release over multiple years.
"We must now focus on ensuring that the industry is prepared to manage this growth taking into account access to water, labour, land and post-harvest services."
The co-operative will pay its growers more for this season's kiwifruit than previously forecast. The total returns to growers are predicted to be $1.39 billion for the 2017-18 season, compared with the August prediction of $1.34b, excluding the loyalty premium.
The Zespri board also approved the additional release of 50ha a year of licence for organic SunGold, specifically for greenfield plantings. It intends to release a total of 250ha over the next five years.
Zespri's after-tax profit for the year ending March 31, 2018 is forecast to be in the range of $96 million to $101m. This compares with last year's after-tax profit which more than doubled from $35.8m to $73.7m, mainly due to revenue from SunGold licences.
The October forecast showed improved prices for all fruit categories. SunGold returns rose from $104,956 per ha to $110,519, green from $52,038 to $55,789, organic green from $46,058 to $46,968 and green 14 from $36,408 to $37,446.
Publication date: 10/19/2017
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