Horticulture prospects look bright
The SunGold kiwifruit licence tender round reflected the level of industry confidence in the fruit's future with its offshore consumers.
The latest 700 hectare tranche of SunGold licences to grow the fruit sold for a median value of circa $400,000 per hectare excluding GST, a 37 percent leap on last year's value.
The offering was oversubscribed by over 2:1 with growers seeking 1660 hectares worth of licences.
The value puts SunGold at the top of fruit license values with the next closest being Envy apples at about $100,000 per hectare.
This year also marked the first time Red kiwifruit have been offered for commercial growing after years of trial work and the 50 hectares of licences were snapped up at a median value of $62,000 per hectare and was also oversubscribed by 110 hectares.
This comes while Zespri continues to work on tuning up Red's shelf storage life and works to lift its potential yield and fruit size.
Bayleys Te Puke salesperson Snow Williams said interest continued to be strong in orchard purchases from both investment groups and from growers wanting to expand their holdings.
“The valuations of orchards are based on very sound economic principles, on what those crops are earning in the market rather than any particular perceived future value, and it is holding the market to very realistic expectations,” he said.
With such good sustained yield and the ability to contract management, more opportunities will open for non-orcharding investors in the coming months.
Bayleys national director rural Duncan Ross said the sector would benefit from an input of external capital as bank sources stay tight.
“The proven track record of the sector and its ability to bounce back from Psa in 2010 and power through Covid-19 more recently should provide potential investors with a good level of confidence about where they are putting their money.”
He said the horticulture sector was reflecting greater attention among consumers to what they eat.
“Seeking out healthy, beneficial fresh products sourced from a clean environment puts the New Zealand industry in an extremely positive position.