Small apples shrink NZ profits

A glut of small-sized apples is expected to dent New Zealand grower profits this season

New Zealand apple growers are bracing themselves for a tough season of poor returns, since inclement weather has reduced crop volume and fruit size, reports Fairfax NZ News.

Pipfruit New Zealand chairman Ian Palmer told the paper that the smaller average size of fruit was far from ideal, and would make it harder for growers to break even this year in both Asian and European markets. 

Cox's orange were the worst affected of the early-picked varieties. Packout rates were down on last year since much of the fruit was deemed too small to export and juiced instead, he said.

Royal Gala, which makes up 35 per cent of the New Zealand apple crop, were also smaller than average, according to Palmer. But packout rates were higher than Cox (90 per cent) because of broader market demand. Nevertheless, unfavourable exchange rates will make it tough to turn a profit, he said.

New Zealand exporters are busy trying sell the glut of smaller Galas to Asia, the paper said, which has led to undisciplined marketing and price undercutting.

Producers had to spend more on growing the crop this year to deal with the tough climatic conditions - persistant rain and a cooler summer, the report said.

Grower returns are already under pressure from the high New Zealand dollar, and producers are struggling after three consecutive bad years.