One of New Zealand's major apple producers will not ship apples to the United States this season as tariffs continue to erode export margins. Tariffs on several New Zealand products, including apples, were introduced in April at 10 per cent and increased to 15 per cent in August. While tariffs were lifted last month on some exports such as beef and kiwifruit, they remain in place for apples, which were valued at close to US$70 million in 2023.
Paul Paynter, a fifth-generation grower from Yummy Fruit in Hawke's Bay, said the tariff level removed any profit from the U.S. market. Hawke's Bay accounts for 64 per cent of New Zealand's total apple volume. Paynter said, "Fruit we shipped to the U.S. this year returned probably a dollar less than the costs, so regrettably, we have no plans to ship to the U.S. in this current season. Until the tariffs are gone, it will be difficult to make a dollar." He added that the U.S. market was also oversupplied and prices were not favourable. Paynter will shift his focus to other markets, though these come with their own constraints. Taiwan remains a destination for larger fruit, though its market is small and can become oversupplied by competing exporters.
AgFirst horticulture consultant Jonathan Brookes said growers were currently focused on thinning. He described market conditions as fluid. "The U.S. market has tended to be overflowing a bit with its own supply. There are key people in there and doing really well, but they're quite specific." He added that "a lot of the markets around Asia and beyond are actually doing quite well." Brookes said outcomes remained "very variety specific," but for most growers, market conditions were "pretty good." He noted that harvest was still some distance away, but early indications were favourable.
Despite the export challenges, Paynter also reported positive orchard conditions. Hawke's Bay orchards under his management cover nearly 600 hectares. He said the region had experienced near-ideal weather, and fruit quality looked strong. "Probably the warmest spring conditions we've ever experienced here in Hawke's Bay, and that early heat is what really sets the trajectory for fruit size." Some blocks are carrying the largest fruit seen in 20 years of record-keeping. Paynter expected the harvest to begin on schedule early next year.
He added that growers had faced difficulties since Cyclone Gabrielle, but with two favourable seasons in succession, he hoped growers could move from a "swimming pool of red ink" to a smaller deficit and "hopefully would be back in black next year."
Source: RNZ
