Tomatoes — covered cropping

Commercial covered tomatoes need at least 4,000sqm of flat land for the greenhouse itself. You will also need space for infrastructure, like driveways and outbuildings.

Design and build

The build cost for a new operation starts at about $2M per hectare, depending on equipment and specifications. The cost can seem daunting, but the up-front investment means you can reach commercial scale and achieve excellent returns, even with a small area.

Greenhouse cropping is very technical. Get advice from qualified, experienced consultants when planning and building your system. Ask for advice about details like:

• row width
• plant spacing
• substrate
• irrigation
• heating systems
• computer controls systems, and
• hygiene.

Other decisions to make before planting include:

• which variety to grow
• how to balance nutrient levels and temperatures throughout the life of the plants, to encourage:
• the right type of growth during root system establishment
• vegetation growth
• flowering, and
• fruiting.

Learning how to grow different varieties takes time and experience.

Selling your crop

Most small growers sell direct to a wholesaler, who will then on-sell to retailers. Growers can pack their own product, or use the wholesaler's packing facilities. Many of the larger growers in NZ deal direct to supermarkets.

Greenhouse cropping provides a steady amount of work year-round. This makes it easier to secure and keep workers and reduces the need for seasonal labour, although seasonal staff are still needed for picking in the summer peak, when the workload increases by around 30%.

Some greenhouse tomato operations plant their crops during the summer, and harvest in autumn, winter and spring to reduce the seasonal peak. Yields are lower, but prices are much higher and there's less demand for seasonal workers. 

Consultants

Choose consultants with the specific skills and experience you need to help you. Make sure your consultants have either:

• relevant experience as head growers or operation owners, or
• specialist qualifications and knowledge – like a plant nutritionist for example.

Manager

Greenhouse managers need:

• an understanding of plant physiology
• a high level of technical ability
• horticultural experience, and
• people management skills, including the ability to manage changing seasonal labour demands.

Team leader

Depending on the size of the operation you may need 1 or more team leaders to direct and instruct the crop workers. Team leaders spend much of their time on inspection and monitoring tasks. This includes detecting diseases and pests.

Crop workers

Typical day-to-day tasks when working in a covered crop include:

• planting
• plant work such as clipping and twisting, to train plants to grow up a string
• pruning, de-lateralising and de-leafing
• mixing fertiliser
• pest and disease monitoring, identification and management
• spray handling and application, and
• harvesting.

Depending on your operation, you may also need forklift and truck drivers or maintenance workers.

Understanding whenua management

Levies

Horticulture New Zealand and industry body TomatoesNZ support growers across the country.

• Horticulture New Zealand collects a compulsory levy of $0.15 per $100 of sales, and
• TomatoesNZ collects a compulsory levy of $0.35 per $100 of sales.

These levies can change, so check their websites to make sure you have the latest information.

Horticulture New Zealand membership levy

TomatoesNZ commodity levy

Food safety

All growers must meet the requirements of National Programme 1 under the Food Act 2014. This ensures produce supplied to the market is safe to eat. The requirements include rules about:

• how growers handle their crops
• managing spray residue, and
• withholding periods.

National Programme 1

Food Act 2014

New Zealand Good Agricultural Practice (NZGAP)

NZGAP is a system that helps growers to keep up with compliance requirements. Becoming NZGAP certified:

• gives you confidence that you're meeting compliance requirements
• makes it easy to find out when regulations have changed, and
• makes your product more attractive to buyers.

NZGAP

Emissions

The Ministry for Business, Innovation and Employment (MBIE) estimates that the covered cropping industry in New Zealand created about 221,000 tonnes of carbon dioxide emissions from heating in 2018. MBIE defines this type of heating as 'process heat'.

Process heat is usually generated by burning fuel. Fuel providers need to buy carbon credits to cover emissions from the fuel they sell. They pass the cost of these carbon credits on to the grower – they're included in the price of the fuel. So, growers pay for their emissions up front when they buy fuel for their heating system.

Fuels with higher emissions cost growers more because the fuel provider needs to buy more carbon credits. This means that growers will pay more in carbon costs for coal than they would for gas, for example. There's no carbon cost if you use geothermal energy or burn recycled oil.

Tomato growers can claim free carbon credits every year. This is called an industrial allocation. Growers who submit an annual return to claim these credits will get an average of 60% of their carbon costs back. If your allocation is higher than the amount of credits you used, for example if you only burned recycled fuel and didn't use any carbon credits at all, you can sell the extras.

Process heat in New Zealand

EPA Industrial Allocations

Licensing or royalty costs

Some commercial varieties are protected by licencing agreements. This means that you must pay royalties or a licence cost for each plant that you grow. These costs are usually included in the price when you buy the plant, so check with the nursery when you make your purchase. 

Council regulations

You may need permits for your tunnel house or greenhouse structure.

You may need a water consent. Getting access to irrigation water can be hard in some areas and you may need to get help from a hydrologist to put your application together. Make sure you can get a water consent before you commit to developing your whenua.

Talk to your local council about the environmental obligations for your area or catchment. Each council has their own rules.

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

Build greenhouses for covered tomato cropping on flat land, in areas with high natural light levels. Avoid waterlogged or swampy areas.

Crop requirements

Profitable tomato cropping needs heat and light. A covered cropping system can provide both of these in any region of New Zealand, using heating and lighting systems. 

Many growers use light diffusers in their greenhouses to scatter light through the crop, so that:

• fewer leaves are shaded, and
• more of the leaves can generate energy for the plant.

Tomatoes grow and fruit vigorously and need careful nutrient management. They get their nutrients through water, so it's important to hire a qualified fertiliser consultant to:

• test your raw water source, and
• prepare a fertiliser regime and ongoing testing programme. 

Time to harvest

Growers buy plants from nurseries and transplant them into substrate bags in the greenhouse. The bigger the plant purchased, the easier it is to keep in balance and the less time to first harvest.

Covered crops will generate income for the grower faster than outdoor, uncovered crops. Depending on the size of the plant, time to first harvest is:

• 5-7 weeks when transplanted in summer, and
• 6-10 weeks when transplanted in winter.

Cropping continues until the plants are around 11 months old, when they need to be replaced.

Greenhouse buildings need protection from strong winds to prevent damage.

Tomatoes don't grow well in cold conditions. They need plenty of warmth, doing best with:

• steady daytime temperatures of round 20^oC
• night-time temperatures of around 15^oC, and
• preferably not dropping below 14^oC at any time.

It is possible to grow greenhouse tomatoes without a heating system in very warm areas, but it's hard to make a profit.

Tomatoes need plenty of light for a good crop. All regions have enough natural light to support a crop during the summer growing season. The following regions can also harvest during autumn and winter, which means better profits for the grower:

• Northland
• Auckland
• Bay of Plenty, and
• Nelson.

Growers in other regions will have either:

• lower yields and lower profitability, or
• higher costs from artificial lighting, which may translate into better profits overall.

Planning for climate change

Greenhouse tomatoes are grown using hydroponic systems. This means the plant gets everything it needs to grow – other than heat and light – in the water that's supplied to it. Drippers deliver water directly into the growing substrate for each plant.

The amount of water your plants need will depend on:

• the variety
• the age of the plant
• the substrate the plant is growing in, and
• the amount of light the plant gets.

Hydroponic greenhouses use a computer control system connected to light meters to manage water delivery. This means there's little waste, and some systems recycle water. A hydroponic greenhouse operation will use less water than an outdoor tomato crop.

Most of the covered tomato market is local, with around:

• $120M in domestic sales, and
• $10M in export sales. 

The industry is experiencing steady year-on-year growth. This is due to:

• new varieties helping growers increase their yields, and
• a market that's receptive to speciality lines, like vine-ripened, cherry and plum tomatoes.

Grower2Grower and TomatoesNZ provide market information on tomatoes in NZ.

Grower2Grower

TomatoesNZ industry overview

The New Zealand Institute for Economic Research (NZIER) expects the tomato industry to continue growing at about 10% per year. The issues facing the industry in the next few years are environmental. Changes to the Emissions Trading Scheme (ETS) and rules around nutrient discharge and run-off will have an impact on growers.

Grower2Grower estimates that a new high-tech operation, built in 2020 at a cost of around $2.5-$3M per hectare, will return 10-40% more in gross revenue than an operation built before 2000. 

New technology and new, high-yield varieties make production cheaper for growers who can make this kind of investment. Extra gains are possible if growers include artificial lighting in a new build, although a careful cost comparison should be made. 

Greenhouses built after 1990 will stay profitable for some vegetable and flower crops. Older operations are expected to be decommissioned and replaced.

Operational costs for a covered growing system are higher than for outdoor cultivation. You need to allow for:

• consumables including fertiliser and other other hydroponic inputs
• equipment maintenance and overheads, like electricity and fuel, and
• the cost of buying, cultivating and harvesting the crop.

Running costs for a medium-to-high range greenhouse are about $830,000-$850,000 per hectare, per year. This depends on scheduled maintenance and a range of other factors. 

Get qualified, experienced advice on:

• the set up and administration of your operation, and
• preparing your annual budget.

Search for funding opportunities

Benchmark results for covered tomato cropping are based on a yield of 60kg of loose round tomatoes (not cherry or other speciality types) per square metre and revenues of:

• $100 per square metre, or
• $1,000,000 per hectare. 

Growers can increase this figure by:

• improving technical systems
• having efficient business processes, and
• careful selection of high-return varieties.

These values translate to a return of around $150,000-$200,000 per hectare, per year once estimated operating costs of $830,000 - $850,000 have been deducted. Your operating costs will depend on:

• market conditions
• your business model, including employees and administration systems, and
• the efficiency of your operation. 

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 the decision-making process. They will be able to provide advice and find out if your project qualifies for funding.

Talk to TomatoesNZ to see what support and resources they can offer if you're thinking about growing tomatoes.

If possible, seek out advice from:

• wholesalers
• people who grow covered crops in your area, and
• knowledgeable suppliers.

Talk to qualified consultants in your area with experience in covered cropping, tomato growing, and sales. They'll be able to provide detailed, impartial advice on what will (and won't) work on your whenua.

Find your local Te Puni Kōkiri office

TomatoesNZ

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

The information in this fact sheet was provided by Grower2Grower, TomatoesNZ, and Te Puni Kōkiri kaimahi.

Data that has not been credited in 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 us at TPKinfo@tpk.govt.nz