Kiwifruit

25 hectares (where an orchard manager is also carrying out practical orchard work).

Orchards as small as 5ha can be profitable if they are run by an owner-operator and if they are run very efficiently. You will also need to have access to infrastructure, such as packhouses, cool storage and agricultural contract services for workforce and machinery.

The major challenges are the costs of getting into the industry and access to water through a water consent. There are many areas of the country where access to water is becoming an increasing issue. 

Licences

Licences are released each year and sold in a competitive tender process, which has increased prices each year. The licence to grow Gold3 was $290,000 plus GST per ha in the 2019 year.

New varieties, such as red kiwifruit, are eagerly anticipated as many growers are keen to investigate more options. 

Hayward green is "off licence" meaning anyone can grow it without paying a fee.

Development costs

Land development costs are based on the type of setup.

They start from around $150,000 per hectare for site preparation, shelter development, trellis, and tree and planting costs.

This will increase if the orchard requires hail cover or a comprehensive bore and irrigation system including water storage. If orchards are setup for this level of intensive production (including a higher density of plantings) costs can be around $400,000 per hectare.

It's really important to understand what type of system might be the most appropriate to achieve the results you're targeting. This is due to the wide range in costs from one system to another and differing growing requirements depending on the variety.

You'll often hear growers refer to "KPINs" which refers to an orchard location. Some growers may have more than one KPIN which means they may have two separate orchard areas (possibly dissected by a road through the middle). There are 165 KPINs for orchards of more than 10ha, which is quite a large orchard by New Zealand standards.

Many smaller orchards are owner-operator models where the owner does a lot of the orchard work. Contractors are regularly used for activities like spraying and mowing the orchard. Seasonal labour can be used for excess pruning, thinning and for harvest.

Often Māori landowners employ an orchard management company to take care of the all of the day-to-day operations and staffing requirements. Trustees monitor the performance of the contracted management company.

Training providers can help owners develop the skills to run the orchard themselves.

Understanding whenua management

Recognised Seasonal Employer (RSE) Scheme

The Recognised Seasonal Employer (RSE) Scheme can help you find and recruit seasonal workers from overseas. You must register as a recognised seasonal employer and meet a number of conditions to be able to use the scheme.

RSE Scheme

Levies

Growers are supported by NZ Kiwifruit Growers Incorporated (NZKGI) and Kiwifruit Vine Health (KVH). Both organisations collect compulsory levies from growers to fund their work on behalf of the industry.

NZKGI collects $0.01 per tray ($0.0028 per kg). KVH collects $0.0104 per tray. These levies can change, so check with each organisation to make sure you have the latest information.

NZ Kiwifruit Growers Incorporated

Kiwifruit Vine Health

Licenced varieties

Growers of licenced varieties like Gold3 must comply with the licencing rules, including only planting the amount that you are licenced to plant. Zespri checks compliance each year and there are penalties for breaching licence conditions.

Council regulations

Many councils require consents for access to irrigation water and for other activities related to changing land use.

Speak to your local council before investing in any detailed planning or other work to ensure you are aware of any consents or permits needed to develop an orchard on your whenua.

Meeting council compliance obligations

Local council contact details

National policy statement for freshwater management (NPSFM)

The National Policy Statement for Freshwater 2020 gives local authorities direction on how they should manage freshwater under the Resource Management Act 1991. As such, some local authorities require growers and farmers to create a Farm Environment Plan (FEP). Make sure you're familiar with the FEP expectations in your region. Check with your local council about the requirements for your whenua or planned development.

Even if your region doesn't yet require an FEP, it's good practice to put one in place for your whenua as part of your business plan. The Foundation for Arable Research (FAR) provides templates you can use to create an FEP.

Developing a business plan

Farm Environment Plan templates

Global Good Agricultural Practice (GlobalG.A.P.)

All Zespri® growers must have GlobalG.A.P. certification.

GlobalG.A.P. accreditation confirms that you have complied with all food safety regulations and that your crop has been produced using environmentally sustainable practices. It has social practice add-ons, and an additional environmental management add-on that is expected to cover most requirements of the NPSFM.

GlobalG.A.P. homepage

Most kiwifruit orchards are planted on flat fertile land, ideally with a slope of less than 8 degrees to allow for operating machinery.

Kiwifruit do not tolerate wind and need well drained, aerated soils. Cold, windy and wet sites are particularly susceptible to Psa disease.

You need male and female vines for pollination. As well as bees and other insects, pollination can be done artificially. This is where excess male pollen is harvested from the male flower and "sprayed" onto the crop during female pollination. Growers often often use both artificial and hive pollination. 

Kiwifruit flower in November to early December, after bud break in September-October. Most fruit is harvested in May.

Kiwifruit is a climbing fruit so needs trellis — pergola systems are the current industry standard.

Growing degree days (GDD’s) are a measure of accumulating heat units throughout a season. Te Puke has the most ideal climate for kiwifruit with 1550 to 1700 GDD’s (base 10°C) per annum over the last four years from 1st September to 1st May.

Over the same period Nelson averaged 1300 to 1500 and Hastings ranged from 1450 to 1550.

Kiwifruit are easily injured by frost. A frost free period of 8 to 9 months is required.

Over 600 hours of winter chilling below 7 degrees is required for spring bud development. All the kiwifruit growing regions tend to have annual sunshine hours of 2,200 to 2,500.

Planning for climate change

Kiwifruit do not tolerate drought.

You'll need to use irrigation to top up soil moisture so the crop has 35 to 40mm/week of water per canopy hectare. You may also need irrigation for frost protection.

When establishing an orchard it's best to ensure a source of irrigation, including storage options, in the future design.

You'll need a water consent for irrigation, so you'll need help from a hydrologist to put together your resource consent application. In some areas, access to irrigation water is becoming challenging.

Export market

Most kiwifruit is exported to continental Europe, China and Japan. Smaller developing export markets include Taiwan and Korea.

Export volume has been increasing with 123 million trays sold in the 2018 harvest season compared to 80 million in 2005. Most of the growth in kiwifruit exports since 2000 has been in gold kiwifruit, first Hort 16a (Zespri Gold) and now Gold3 (SunGold).

Domestic market

New Zealand supply covers markets from harvest in April to June through the winter and spring. Northern hemisphere plantings have been licensed by Zespri to supply the New Zealand ‘off season’ and ensure customers have access to kiwifruit year-round.

Packhouses and coolstore facilities are located in most of the fruit growing regions, however most are in the Bay of Plenty, servicing the North Island where the majority of the production is. Kiwifruit is shipped mostly from the port of Tauranga, however other ports around the country also ship fruit to overseas markets.

The kiwifruit market is strong domestically and internationally.

The Zespri supply model is working well for the industry. Having a unified brand across the markets is very successful and has helped the industry weather challenges like Psa. 

Zespri has a large focus on the consumer and consumption trends, which allows them to adapt quickly, and target the correct consumer bases for each market. This is seen in the development of new varieties like red kiwifruit which seeks to find a niche in the Asian market.

Hayward green kiwifruit is not licenced, so anyone can plant this variety. This means that it is not possible to control the volume of fruit coming onto the market, creating a risk of price variation for growers.

Another industry risk is the ability for Zespri to protect its IP, where unauthorised plant material is taken and grown by competitors overseas. Zespri takes legal action to try and control this. A civil case is currently underway after more than 2,000 hectares of Sungold kiwifruit were found growing illegally in China.

Labour, orchard working and overhead expenses average $40,000 to $50,000/ha. This does not include debt costs, lease, depreciation or tax.

Search for funding opportunities

Once the orchard is mature, producing 14,000 trays per ha of SunGold, and assuming an Orchard Gate Return (OGR) price of $9.00/tray, gross income averages around $126,000/ha. Gross income for Zespri Green is currently averaging $60,000 to $70,000/ha.

Time to first harvest can vary however it can be as early as year 3 depending the original design approach. Time to mature harvest is 5 to 7 years, depending on the orchard setup and management expertise. Vines can be productive for 30 to 50 years and are often regrafting with newer better varieties as they are released.

Production results are measured in trays per hectare. Recent averages have fluctuated significantly (due to the impact of Psa and the need to re-establish crops, sometimes from scratch). Production volumes are also dependent on the growing system (irrigated vs no irrigation, intensively planted or not, fully sheltered and covered or partially).

Growers of Gold3 target production of 14,500 to 20,000 trays per hectare. Hayward green typically targets 10,000 to 16,000 trays.

Organic systems typically produce fewer trays per hectare although price per tray is often higher.

Recently growers have been budgeting on Gold3 prices of $8 to $10/tray and Hayward green prices of $5.50 to $7/tray. These prices are based on Zespri’s suggested 5-year forecast.

Zespri pays additional per tray premiums for fruit harvested early and for fruit with high dry matter which means it is sweet. Premiums can also be achieved for good-sized fruit and for fruit that can store well in the packhouse.

There's a high capital outlay and a long time before operating costs are met, so the financial risk of a kiwifruit venture is high. However after break even is met, kiwifruit becomes a highly profitable land use. This can be as fast as 8 years, and 12 to 15 years on average.

Seek advice early, before you invest in any design or development.

Talk to your local Te Puni Kōkiri office to see how they can support you through your decision-making process. They will be able to provide advice and find out whether your project qualifies for funding.

Talk to Zespri and the industry organisations to see what support and resources they can offer to people thinking about growing kiwifruit.

If possible, seek out advice from people who grow kiwifruit in your area as well as knowledgeable suppliers.

Talk to qualified consultants who are experienced in kiwifruit growing and other land developments in your area. They will be able to provide detailed, impartial advice on what will (and won't) work on your whenua.

Find your local Te Puni Kōkiri office

Zespri

New Zealand Kiwifruit Growers Incorporated (NZKGI)

Kiwifruit Vine Health

This fact sheet provides general information to help start and inform conversations. It is not comprehensive enough to support detailed decision-making.

The information in this fact sheet has been contributed by AgFirst, Fresh Facts and Te Puni Kōkiri kaimahi. Data that has not been credited in the body of the fact sheet has been sourced from StatsNZ or provided by the contributors.

You can provide feedback on the content on this or any fact sheet by emailing the Whenua Māori Service at whenuainfo@tpk.govt.nz