Orchard buyers guide

That comes as no surprise when you look at the potential returns on offer and the fantastic lifestyle orchardists enjoy. So for those of you who’re new to the game, here’s a few of the most common questions we get asked, and a few you might be too embarrassed to ask…

Kiwifruit orchards are supported by an industry that is geared to maximise returns for Growers. The legislatively-protected marketer of New Zealand Kiwifruit, Zespri (ZIL), is obligated to maintain and grow existing markets to increase international demand for quality New Zealand Kiwifruit and to maximise financial returns for Growers. The “single-desk” exporter model prevents competitive pricing tension and protects the reputation of New Zealand-grown Kiwifruit as a quality and dependable product around the world.

For the 2016/17 harvest, the average forecast return (“OGR” or Orchard Gate Return) for Green Kiwifruit is just over $53k per hectare and for Gold Kiwifruit it is just over $95k. With average on orchard costs sitting at about $30k per hectare, the maths is pretty simple and compelling. Remember, this is the average. When growers put in the time and effort, the rewards are generally, better.

Orchard Gate Return is the industry metric used to measure the money an orchardist gets paid per tray of kiwifruit that goes to market. To get a good OGR, Growers need to supply good fruit and packhouses need to get your fruit to market with minimal wastage from damage caused by mishandling or mismanagement. So, in a nutshell, if your goal is to maximise OGR, put the effort into growing good fruit and select your packhouse wisely. (For the record, Apata delivers exceptional OGR’s!)

Several options exists here. Experienced growers tend to manage their own orchards, whereas less experienced owners tend to contract orchard management businesses. It’s even common for the most seasoned grower to engage an external orchard consultant, to ensure their orchards are maximising yields, and being well set for future seasons. Growing good fruit is relatively simple, but the science of growing the best fruit, can be a complex business. If you’re purchasing an orchard as an investment and want to maximise returns, partner with crop experts and enjoy better returns.

Post-harvest operators, such as Apata, will pack your fruit on behalf of Zespri for a fee. Key things to consider when choosing a post-harvest operator are historical Fruit Loss and OGR numbers. Apata does exceptionally well in both counts so if you’re not sure, best you talk to them first. As you can imagine, a lot of fruit from a lot of different growers is ready to pick and pack at the same time so pack houses need impeccable timing, plenty of capacity, and it’s also helpful if they thrive on pressure because when the seasons on, it’s foot to the floor action 24 hours a day!

Once fruit is harvested, you will be paid monthly by Zespri, via your post-harvester’s trust entity. Factors determining how much you are paid include:

• Fruit size (generally, big is better)
• Taste (to ensure that Zespri kiwifruit consistently tastes great)
• Yield (how much fruit you produced)
• Time (how early or late your crop was harvested, early crops get higher returns)
• Storage (how long your fruit can be held in coolstores or controlled atmosphere environments)

As with any primary industry, orchards are exposed to the vagaries of climatic conditions and other natural nasties. You may remember reading about PSA in the media? It was pretty tough for a few years there as the PSA bacteria wreaked havoc with kiwifruit crops. Fortunately, the industry has managed this and kiwifruit has bounced back in a big way. Overall, kiwifruits rise has been absolutely stellar, but like any crop, there are risks, and not all of them are naturally occurring. Mishandling, during picking and packing, can seriously erode profits. Likewise, poor management produces poor crops. You can’t control mother nature, but you can make sure you have the best people working for you – so choose wisely.

There’s always room for improvement, whether that means more yield or lower costs. Good orchard managers, with the help of a good lab and an experienced eye can perfectly balance an orchard’s input levels to reach maximum yield for the least possible money. So the answer is yes; the orchard you’re buying, with some expert handling, can potentially improve on past performances.

It’s not uncommon for Kiwifruit orchards to have mixed crops, with Avocados being quite popular. It’s hard to beat kiwifruit, it’s a remarkably lucrative crop, but don’t be put off if the property you’re looking at does have mixed use, particularly Avocados. Apata is in fact the largest processor of Avocados in the country, so if you’re unsure of the viability of having them on your new property, give them a call.

Many orchardists live in a residence on their orchard and it’s not uncommon for an orchard to have multiple dwellings. Rural properties to rent are in high demand, so if you’re planning on being an absentee owner, or you don’t have an orchard manager living on-site, you’ll have little problem finding tenants for any homes on your new orchard.