Horticulture Market Update
Kiwifruit has continued to lead the way in the horticultural property sector when it comes to return on investment and prices paid per hectare.
Record sales values for properties growing both green and gold Kiwifruit varietals have been recorded over the past six months, and buyer groups paying these premiums are a mix of local growers, syndicates, iwi groups and investors looking for strong cash returns.
Zespri recently released licences for SunGold G3 and RubyRed varieties, with allocated licences being less than the maximum hectares available.
With a reduction to only 350ha (from 700ha) for SunGold G3, it’s easy to jump to the conclusion that demand has caught up with supply.
However, criteria changes to the tender process, such as reducing the maximum total bid area per bidder, is likely to have had an influence.
At $801,000 per hectare plus GST, the median SunGold G3 licence price was up 45.6 percent on 2021 figures, while the median price for RubyRed was almost twice last year’s median price at $147,000 per hectare plus GST.
Likewise, we saw strong sales results for mature SunGold orchards at the start of the year – exceeding $2 million per hectare, and green varietal orchards fetching in excess of $800,000 per hectare.
Demand for kiwifruit assets remains strong throughout the Bay of Plenty, Northland, and Gisborne regions.
The ability to capitalise on early harvest premiums in Gisborne has continued to attract buyers, with values across various horticulture crops seeing record levels in the past six months, however, with some prominent players in the market recalibrating and reassessing their position at current values, demand has eased.
The attraction of early premiums has now expanded further through the country, with historically untapped centres such as Wairoa seeing a huge lift in the value of flat land, particularly for the development of apple orchards to capitalise on the warm and early Wairoa climate.
The avocado sector provides a timely reminder that much of New Zealand’s food bowl remains reliant on commodity markets.
The payouts for the season are a promising sight after a relatively tough past six months, with growers now budgeting on $15-$20/tray.
Focus remains strong in further developing Asian markets, leveraging the ‘superfood’ card.
Research and development show avocado being added to skincare products and having promising pharmaceutical benefits – so the fruit’s future looks bright, with the current avocado orchard prices potentially representing excellent buying value.
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