market report - rural

The market for rural production blocks has showed some improvement through the middle and latter stages of 2010 (until the announcement of PSA in November).  There had been a period of reduced activity levels for over two years.  This followed strong value increases and high activity levels over the three years prior to this.

Numbers of kiwifruit orchards sold had been quite strong in the eastern areas from Te Puke and further eastwards.  Enquiry levels have improved across the board and there appeared to be more optimism in the marketplace following raised price predictions.  Despite increased activity levels, prices remain relatively soft other than for Gold orchards and those with good potential to convert to Gold and new varieties.  Some poorer producing blocks with poor support structures remain difficult to sell.  Values have tended to be around $200,000 per canopy hectare for reasonably producing green blocks (excluding house site and other improvements) and there have been sales at over $300,000 for strong producing gold blocks.  Some poorly performing Green orchards have sold for less than $150,000 per canopy hectare.

ZESPRI anticipated orchard gate returns projections are currently around $4.09 per tray of Green kiwifruit and $8.72 per tray of Gold kiwifruit.  The Zespri Gold variety is obtaining good prices and the possibility of further new varieties rather than the Zespri Green seems to be the area of most optimism in the industry.

Of concern to the kiwifruit industry is the discovery of PSA, a bacterial disease of kiwifruit vines.  The suspected infection was notified on November 5th and confirmed the following day.  The long-term implications in terms of affect on crop quantities and quality remains to be seen but at this early stage it is clearly a concern for growers and the industry as a whole.  In most cases the only symptoms are of leaf spotting however in some cases the more severe strain of the disease infecting vine health has occurred.