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Howard Hansen - Hansen Orchards

"AU: "There are just too many January cherries around"

Howard Hansen, Managing Director of Hansen Orchards is a 4th generation fruit grower. His great grandfather was a Norwegian merchant seaman who stopped off in Tasmania, liked what he saw and was granted his first piece of land in 1887, which he planted with apple trees. He had six sons, all of whom became fruit growers. Rupert, Howard's grandfather moved to the Huon Valley in 1944 because it was difficult to compete with his brothers. He bought an existing orchard and went on to expand his apple business.

"Back then there were 2000 apple growers," explains Howard. "When I started in the business there were 200 left, today there are only 20 or so professional growers."

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The apple industry back then was about counter season supply into the Northern Hemisphere and cold storage was not commonplace. New Zealand and Tasmania supplied the Northern Hemisphere for part of the year, but according to Howard things conspired against the Southern Hemisphere growers and now the exports are mainly to the mainland or to SE Asia where competition is tough.

Howard is very optimistic about the future of apples, "The only apples we have planted for the last 10 years have been trademark varieties, Jazz, Envy and Rockit. We mainly supply the domestic market, with selected counts going to export, it is difficult to be competitive outside Australia due to our labour costs and I don't see this changing in the next few decades."

Howard said they prefer to work with T&G on the Jazz and Envy apples, and the Montague Group who have the licence for them in Australia, as it is a model which has worked for them so far. He said they don't have the resources or volumes to launch and market their own variety and are happy with things the way they are.

"In my final year of studies, in 1994, I was looking for an alternative to apples and studied the opportunity to grow cherries. The irony was that because cherries can't be stored, we could again have a counter seasonal supply into the Northern Hemisphere. So we planted 400 cherry trees in 1995, that was our first toe in the water and we have continued to plant more (140 -150 ha planted now). Cherries make up about 75% of our revenue."

"We are also partnered with the Summerland Varieties Cooperation from British Columbia, Canada, who are breeding some of the latest maturing cherry varieties in the world. We hope to be the only ones supplying the latest cherries from Tasmania."

The biggest challenge to growing cherries in Tasmania is the climate, which is relatively wet. Howard did a financial analysis and predicted they would get two reasonable years, three average years and three bad years for growing cherries. He predicted that they would not pick during the three bad years, but the reality is that their packouts have been a little bit better than first forecast, but in the Huon Valley an average of 750mm rain falls each year so production is always going to be weather dependent.

"The business I started running was an apple business, mainly Red Delicious. We didn't have many options to start with and the only way we could afford to plant cherry trees was to grow them ourselves, so we started our own nursery. We had to work with the land we had as we didn't have the funds to buy new land. We have since bought land in the Derwent Valley, it is only 45km north, but has half the summer rainfall of the Huon Valley. The value of the land there at that time was around half that of land here and it had one of only two rivers which hadn't already had all of its water allocated so we were able to get water rights. Today the bulk of our production takes place in the Derwent Valley. We went there because of the dryer climate."

But when it comes time to protect your cherries from birds, do you spend millions to protect it just from birds, or do you spend a bit more and put rain covers over it to protect it from much more?

Howard chose to put the rain covers over all of the cherry orchards.

"Rain covers have changed the equation, we have spent close to ten million Dollars on rain covers which in a wet environment will guarantee our supply to our customers. We are probably the only producer who has 100% of our production under cover and can guarantee supply."

The rain covers also change the micro climate within them and Howard said that most of those changes are positive: "The leaves are bigger, the trees are healthier and we can grow a bigger average sized fruit. The only challenges we have is in very warm weather where there is no breeze, it can get very hot under the covers. For these situations we have frost fans which will blow the flaps in the rain covers and create a breeze."
Hansen Orchards has worked to extending the cherry season further into February. "The reality is that the world has enough cherries in January from NZ and Chile," said Howard. "Chile have enough trees in the ground to grow 350,000+ tonnes of cherries. 160,000 tonnes just going into China alone this year and their labour cost is only 10% of ours. We have January cherries but it is not something we get excited about."

He sees the amount of cherries available in January as one of the biggest challenges ahead. "There are just too many January cherries around and finding a point of difference to make up for the additional costs which we have is difficult, as is finding customers who are prepared to pay enough of a premium for Tasmanian cherries."

The bulk of Hansen's cherries go to Asia and primarily in small packs, 1kg or 2kg gift boxes with gold and red packaging for Chinese New Year gifts. The years when CNY is in February is ideal for Howard as generally he is the only grower in the world with fresh cherries at that time of the year.

This year however, that is not the case, "The rain covers have been out since September which allowed the growing degree days to accumulate a little bit earlier, meaning we are not as late as we normally would be. This in combination with the warmest November since records began has brought the fruit forward by around 10 days. The yields are better, the sizes are better so from a horticultural side it has been a good thing, but from a marketing perspective due to CNY falling on 16th February it has not been so good."

For more information:
Howard Hansen
Hansen Orchards
Tel: +61 3 6264 0200

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