Land Use Fact Sheet
Avocados
Avocados are an important high-value horticultural crop in New Zealand. They are our third largest fresh fruit export earner, behind kiwifruit and apples. The market is growing and the industry is actively investing in growth.
There are around 4,000 hectares of avocado orchards in New Zealand. Hass is the most widely planted variety in New Zealand and is currently the only variety that can be exported.
Returns for well-run orchards are high, but avocados require skilled management to maintain healthy trees and a reliable crop. Without this expertise it's difficult to make a profit, so it's important to seek advice and support.
Overview
Regions
There are 4,000 hectares of avocados growing in New Zealand. 85% are in the Bay of Plenty and Northland.
Growing conditions
Avocados are very sensitive to root rot. They need free-draining soil and skilled management to control the risk of disease.
Climate
Avocados need warmth. Frosts and temperatures around 0oC cause damage to flowers, fruit and new growth.
Commercial scale
You'll need at least 25ha of land unless the orchard will be run by an owner-operator and can use existing infrastructure.
Getting started
You will need a supply agreement with a commercial packhouse to sell your fruit in New Zealand and overseas.
Skills / employment
It is difficult to make a profit without the expertise of a skilled orchard manager to keep trees healthy and productive.
Regions
Of the 4,000 hectares of avocado orchards in New Zealand:
- about 85% are in the Bay of Plenty and Northland, and
- about 10% are spread out across Auckland, Waikato and Gisborne.
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Commercial scale
25 hectares (where an orchard manager is also carrying out practical orchard work).
Smaller areas can be profitable if they are run by an owner-operator or 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 average size of a commercial avocado orchard is 4.3ha, although this is growing rapidly as existing orchards get bigger and new, large-scale operations are developed.
Getting into the industry
Supply agreements need to be made with a packer to get the fruit to market. Packers can also help connect growers to the export market.
Establishment costs
New Zealand Avocado estimates establishment costs for preparing the land and installing infrastructure at between $95,000 and $117,000 per hectare as at January 2018. This will increase for new intensively planted and fully irrigated systems.
Costs depend on orchard layout and the production system to be used. Traditional low density systems starting at 100 trees per hectare have lower overheads and lower production. New rootstocks that are resistant to root disease have made higher density systems of 400 trees per hectare possible. These have higher overheads but also much higher production.
Harvest and crop management
Avocados reach maturity on the tree, but will not ripen until they are picked. Some varieties can be left on the tree for months before picking. This provides lots of management options including the opportunity to extend the harvest, spreading the return out over a longer season.
Avocados have a biennial yield, which means they alternate between a high-cropping season and a low-cropping season. With careful management, including pruning and thinning, you can keep these fluctuations to a minimum.
The only month avocados are not harvested is July. Hass is picked from August with late harvest finishing in March, but Reed can cover the intervening time.
Picked fruit can be stored for up to 30 days. Packhouses provide advice on when to pick for the best quality and returns.
Skills and employment
Blocks of 40ha or more require a full time manager. On smaller blocks the manager will also carry out practical orchard work.
You need proficient staff and good training to be successful. Training providers can help whānau develop their skills. Support and resources are also offered through industry organisations including New Zealand Avocado and Horticulture New Zealand. Seek advice from experienced consultants when you are planning to employ staff.
Compliance
Food safety
All growers must meet the requirements of National Programme 1 under the Food Act 2014 to ensure that the avocados are safe to eat.
Industry group registration
Anyone growing avocados for sale may join the NZ Avocado Growers Association (NZAGA), the avocado grower's industry group. Membership provides access to resources and a range of support. Members are also issued with a Property Identification Number (PPIN).
New Zealand Avocado provides information on the additional requirements exporters need to meet.
Council regulations
Many councils require consents for access to irrigation water and for other activities related to changing land use.
Talk 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
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.
Growing conditions
Avocado trees are prone to root disease caused by Phytophthora cinnamomi, a type of mould that lives in the soil and thrives in over-wet conditions. You can reduce risk of disease by:
- planting trees in free-draining soils
- using rootstocks with higher resistance to infection, and
- using management practices, such as soil ridging around the tree, to improve drainage and soil aeration.
The Far North, which has a good climate for avocados, has sandy soils that don't supply enough nitrogen for the crop. Nutrients can be added to the irrigation water to supply nitrogen and other nutrient needs. This is called fertigation.
Flat or gently sloped land with a north or north west aspect is best for achieving ideal growing temperatures.
Shelter must be provided to prevent fruit damage or loss. Avocados that fall from the tree can't be sold as fresh fruit as this breaches food safety standards. Instead they can processed into oil and other products.
Windbreak fences for artificial shelter can be put up quickly and need little maintenance, but they are expensive. Natural shelter belts are less expensive, but they need to be planted at least two years before the orchard is stocked. They also need to be well-managed so that the roots don't compete with cropping trees.
Each tree produces hundreds of thousands of flowers in spring. Each flower will open twice. On day 1 it will open as a female and on day 2 it will open as a male. Around 0.3% of these flowers will result in a fruit. Pollination is carried out by bees and other pollinating insects, although avocado flowers are not very attractive to them so it's important to control weeds and other food sources before flowering begins.
Climate
Avocados are a sub-tropical fruit that need warmth. Temperatures close to 0°C will harm young growth, flowers and dormant buds. Winter frost harms fruit close to ripening and kills buds which would form the next year’s crop. There are ways to reduce severity or avoid a frost, including wind machines, irrigated frost protection, or burning natural gas.
To promote spring flowering the trees need a period of day temperatures under 20°C.
Orchards need very good shelter to develop a satisfactory micro-climate for a successful crop.
Water
Irrigation is common, especially during flowering and fruit development. Irrigation requirements depend on rainfall and how much water the soil naturally retains. Every block is different, so it's important to get advice from a skilled consultant to create an irrigation design and plan.
Base your water use calculations on providing 5mm/day through irrigation during hot summers, in weeks with no rainfall and once the tree has used up the available soil water.
Market
Just over 50% of New Zealand avocados are exported and 40% sold in the domestic market. Processed product makes up the rest.
Australia takes about 80% of the export crop, with the rest sold throughout Southeast Asia, particularly Korea. In 2018 the first exports to China began, opening a large market which has excellent growth potential.
The domestic market for avocado is strong, with the average New Zealander eating 2.2 kg (about 12 fruits) a year. Avocados are not imported into New Zealand — all avocados in the shops have been grown locally.
Future industry
In 2018 the industry set down a strategy to triple productivity and quadruple returns per hectare by 2023, supported by a government-funded Primary Growth Partnership scheme.
Research has focussed on:
- assessment of new cultivars and rootstocks that increase production, improve pest and disease resistance and improve the range of soils and climates that can support the crop
- opening up new export markets and growing existing markets, and
- production systems to increase yields and reduce costs.
Sector challenges include:
- biosecurity
- dependence on the Australian market
- accessing skilled labour
- getting more consistent yields,
- improving fruit consistency and quality throughout the supply chain, and
- informing consumers on how to handle, store and use avocados.
With the continuation of the industry ‘Go Global’ Primary Growth Partnership, and the recent growth of the industry, there is considerable investment into mitigating or solving these issues.
Operational costs
According to the New Zealand Avocado Annual Report 2019:
- the ‘average orchard’ has costs of $10,000 to $15,000/ha
- the 'excellent grower' has costs of $30,000/ha.
These figures do not include administration and overhead costs such as management wages. These will differ depending on your business model.
'Excellent' growers invest more in testing and gathering information to support decision-making, including using consultants and advisors and conducting their own trials.
These investments help to improve fruit quality and production, resulting in better and more consistent returns.
Grower returns
In the 2017/18 growing year, the average Orchard Gate Return/OGR for established orchards was over $27,000 per hectare. The highest performers grossed $78,000/ha.
This indicates profit margins of $12,000 (for an average grower) to $48,000 (for an excellent grower) per hectare. These figures may increase as new intensive systems reach maturity and hit full production.
Most avocado trees provide their first commercial crop in year 3, with increased production over the next 10 years. Avocado trees continue to crop well for up to 20 years before production and quality start to decrease.
Currently, mature plantings produce an estimated 7 tonnes per hectare. Newer intensive plantings are reaching that level of production 4 or 5 years from planting and on maturity may reach 25t/ha or more.
Seek advice
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 the industry organisation to see what support and resources they can offer to people thinking about growing avocados.
If possible, seek out advice from people who grow avocados in your area as well as knowledgeable suppliers.
Talk to qualified consultants who are experienced in avocado 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.
About this fact sheet
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, New Zealand Avocado 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 us at TPKinfo@tpk.govt.nz.
