Zespri lifts returns to growers, but Psa hits co profit

Zespri lifted total returns to growers 4 percent from a year earlier to $883.3 million in 2010/11, but is warning of a tough 24 to 48 months as the industry learns to live with disease Psa.

Expenditure of $12.9 million on the response to Psa was a key factor in a fall in the horticulture marketing company's net profit to $7.3m from $25.9m a year earlier.

Zespri said another factor was an increase in the loyalty payment to growers to 25c per tray from 15c.

Average orchard gate returns per hectare had risen 7 percent to $41,830. That was made up of a 9 percent rise in green kiwifruit to $32,234, a 5 percent fall in green organic fruit to $37,541, and a 1 percent rise in gold fruit to $83,785.

Global kiwifruit sales lifted 1 percent to $1.51 billion, although the number of trays sold slipped 1 percent to 106.8m. The number of New Zealand-grown trays was down to 98.1m from 98.5m, with green trays down to 69.9m from 71.9m, green organic unchanged at 3.3m, and gold trays down to 21.1m from 22m.

Zespri chairman John Loughlin said the results were particularly pleasing considering the challenges facing kiwifruit growers.

The environment in 2010/11 had been tough, with a stuttering economic recovery, rising oil prices, seasonal challenges, the impact of Psa on Zespri's orchards in Italy, and the confirmation of Psa in this country.

"The increased return to green kiwifruit growers was a highlight because average orchard yields were down by 4 percent, freight costs due to rising oil prices were up 5 percent and the New Zealand dollar strengthened through the year," Mr Loughlin said.

The industry was benefiting from strong growth in Asian markets.

Beyond the 2011 season, the future of the kiwifruit industry in the short to medium term was uncertain, with the impact of Psa yet to be determined, Mr Loughlin said.

This financial year Zespri would contribute around $2.6m toward an almost $3.5m multi-agency investment programme in Psa research and development.

"We have a tough 24 to 48 months ahead of us as we learn how to live with and manage Psa. However, I'm confident the industry will overcome Psa and meet its long-term growth plan to triple export earnings from $1b today, to $3b by 2025," Mr Loughlin said.

Indicative returns for 2011/12 were expected to be slightly lower than for 2010/11.

A 9 percent increase in the volume of green organic kiwifruit and a 28 percent rise in gold fruit would put pressure on average market returns, as more fruit would go into lower returning markets than in previous years.