Nearly three years after Cyclone Gabrielle, Hawke's Bay apple grower Paul Paynter says remedial work across orchards is still ongoing and financial pressure remains. Paynter, of the Yummy Fruit Company, reports continued replanting and clean-up, including removing unexpected willow trees emerging among apple rows.
The business lost 180,000 apple trees in the cyclone, largely in the Esk Valley north of Napier. Paynter says they have not been able to replant in that area because banks will not lend for orchards in zones still considered at risk of flooding. "So, it's a big challenge, and we still haven't stopped spending money to get it right," he told Rural News.
He notes that rebuilding an apple block is a long process. "The problem is that with an apple tree, it takes a couple of years to grow a nice nursery tree and pop it into the ground, and then you have about four years after that until cash flow breaks even. In effect, it takes between six and seven years to get yourself in a better position than you were previously in." Paynter says the main concern is running out of capital, especially as lenders are reducing exposure to the sector. He adds that the company has not made a large profit since COVID.
"We have had five dire years, and it's difficult to survive these days with the banking regulations that are less tolerant of businesses that have non-performing loans. It's a tough world, but it's only a downturn, and we have beaten our budget the last two years, and we have got a very good trajectory for the future," he says.
The company leased land in the Esk Valley, much of which is now used for cropping. Paynter says asset values have decreased while debt levels have risen, raising concerns that some businesses may not continue operating. He notes that structures are in place for the business to return to profit in a normal season.
Looking ahead, Paynter expects that the main challenge for growers will arrive in a few years, when new capital will be required for development. Despite current constraints, he says the sector is moving forward with innovation and new plantings, and he describes the long-term outlook as positive.
Source: HortNews
