For the second consecutive year, New Zealand apple growers are unlikely to make money from sales in their traditional export markets of Europe and the UK. Increased on-orchard costs, high freight charges because of distance to market, coupled with an unwillingness by key European countries to pay more money, is making exporting apples there financially unsustainable.
According to AgFirst horticulture consultant Ross Wilson, AgFirst data is showing that New Zealand's cost of production has had a compound inflation rate of about 7 percent for the last three to four years. "And to be a really successful trader we have got to be internationally cost competitive. We've heard governments talk about the need to control inflation. And we're living that absolutely at the moment because inflation for us is out of control. Our costs have risen to a point where we now have markets that are unwilling to pay our cost of production."
Wilson said to cope with being a high cost producer exporters have managed to compete by being the best, with the best varieties and superb quality. He said that was no longer enough in Europe, so growers were pivoting to cope by pulling out trees like Pink Lady, Jazz and Braeburn, and only planting sweet, aromatic varieties preferred in Asian markets.
Source: rnz.co.nz