New Zealand looks set for a strong 2020 topfruit season, according to an annual USDA report.
New trees coming into production and trade developments are driving forces behind the year's positive outlook.
The report forecasts apple exports to rise 4% year-on-year from 391,000 metric tons (MT) to 405,000MT.
It is expected that a total of 598,000MT of apples will be produced.
The USDA said that 10,180 hectares of apples - a 4% year-on-year increase - are expected to be harvested.
For pears, it also anticipates an increase. Exports are anticipated to rise 13% year-on-year to 4,500MT. This growth comes after a decline in the previous season.
Total pear production is expected to rise by 6% to 14,000MT. That comes as 375 hectares of pears were planted for 2020, a rise of 4%.
Constraints for the future and prevailing growth
While the expected topfruit numbers are up from 2019, growth will likely be constrained by various factors. Some of those include labor shortages, Braeburn tree removals and lower yields from younger first harvest trees.
In addition, the current land situation seems to be changing, according to the USDA report.
Orchard expansion was previously driven by good market prices and a positive outlook for productivity. But following these high hopes, the expansion for planted and harvested areas may decrease in upcoming seasons. Land shortages and availability of water in the country have impacted the ability to increase hectares.
For instance, Hawkes Bay- the largest apple region in the country - is expected to increase environmental regulations in the next year. This will likely make operating costs more expensive. It could also impact the amount of land available for expansion.
Trade and market access
Furthermore, trade deals for the country continue positively influencing pricing and exports. Most notably, progressive tariff reductions in Japan will be a key factor in strong apple sales from New Zealand.
Under new CPTTP tariffs, the country's apples entered Japan at a price that was 5.6% lower than in 2018 and will decline by 11.4% for 2020.
This comes alongside consistent positive demand growth in Asian markets.
Specifically, with apples, there has been a dramatic shift in exports away from Europe and towards Asia in the past 15 years.
Compared to 2004 where the EU held a 67% market share of New Zealand apple exports, Europe only made up 26% of the market in 2019.