NZ kiwifruit profitability to fall by a third, govt report finds
A New Zealand Ministry for Primary Industries (MPI) study has forecast the 'model orchard' profitability for kiwifruit growers to fall by a third to NZ$44,000 in 2012-13.
This fall comes despite expected higher per tray returns for both green and gold kiwifruit varieties; the former due to reduced post-harvest fees and the latter because of higher in-market prices.
The main culprit for the expected fall in profitability is clearly vine disease Psa-V, which was first identified in the country in 2010.
The MPI model comes as part of its Farm Monitoring Report series, and is adjusted to reflect the transition in Bay of Plenty orchards from Hort 16A kiwifruit to gold varieties such as G3 that are less susceptible to the disease.
With Psa impacts on individual Bay of Plenty orchards ranging from none to severe, MPI has modelled three additional scenarios for 2012-13.
In the worst case scenario of no gold kiwifruit production, MPI has predicted a cash operating deficit, a pre-tax loss and a negative cash position, which would imply an injection of additional cash if growers were to cover operating costs and living expenses.