Saturday, December 2, 2023

Kiwifruit industry eyeing ‘significant’ flood losses

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Hawke’s Bay and Te Tairāwhiti getting heads around the full extent of Cyclone Gabrielle destruction.
Ōpōtiki kiwifruit grower Adrian Gault says the court decision to allow SunGold licences to be included in rates valuations leaves growers facing massive surges in their rates bill.
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Kiwifruit growers in Hawke’s Bay and Te Tairāwhiti are still getting their heads around the full extent of losses incurred from Cyclone Gabrielle, with early indications they will be significant.

Colin Bond, CEO for NZ Kiwifruit Growers Incorporated (NZKGI) has taken a close look at orchards in both regions. He said growers are being left to take time to absorb the losses and assess before submitting their estimates. In some cases this will not be hard to do, as entire orchards have been written off.

While not the largest areas for kiwifruit growing, Hawke’s Bay’s 220ha is well established. Gisborne’s 700ha of plantings had experienced a strong growth phase, particularly with SunGold fruit in the past three years, adding an extra 100ha or so of new plantings for each of the past three years.

Bond said estimates of 30% losses to Te Tairāwhiti crops and 70% losses to Hawke’s Bay crops would not be unreasonable. The figure could grow further if the regions continue to experience the wet weather that has damaged previously undamaged vines.

Other areas hit by weather events include 20-plus orchards in Bay of Plenty still cleaning up from Cyclone Hale, and a smaller number across Coromandel and Northland.

Gisborne’s higher portion of more recent plantings mean there will be orchards that have not even generated a crop return before being wiped out.

Growers typically do not have crop insurance coverage, but Bond hopes most will be covered for the significant losses also suffered on damaged or written-off equipment and machinery.

“Once they have got in the right head space to fully assess things there will be questions to ask around technical support.

“That will include ‘Do I drop this season’s crop to protect the vines for future crops?’ and “How do I get rid of silt?’”

He said the $2000-a-hectare of funding aimed specifically at orchardists to assist with the clean-up is welcome, but unlikely to be enough.

“It will be incumbent upon industry in coming weeks to help government understand the short-term impact and the period of recovery required to get back to full production.”

Collectively across the two regions the kiwifruit sector contributes over $100 million to the local economies.

There will also be some big questions growers will have to address before they can decide whether to abandon orchards or attempt to restore them. 

These include local authorities’ decisions on infrastructure rebuilds that affect orchard operations, including stopbanks, bridges and roading access.

Meantime those growers due to harvest in coming weeks will face challenges, including Hawke’s Bay fruit having to be trucked eight hours via Manawatū to get to Bay of Plenty packhouses, compared to the usual four-hour trip. 

Gisborne growers are more fortunate, having a Seeka packhouse in the region, but they face uncertainty over whether or not the  Waioeka Gorge road will remain stable and open to Bay of Plenty.

Putting his banker’s hat on, Bond said the industry has had to re-consider risk after a sustained period of strong returns.

“We now have a reminder here of risk and expect things to re-price on the back of that.”

The market story for kiwifruit, however, remains strong, with all markets reporting buoyant consumer interest.

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