The kiwifruit industry in New Zealand has faced challenges due to increased on-orchard costs, adverse weather, and economic difficulties. However, the sector's fundamentals are now showing signs of improvement. A report by Colliers Rural Valuation, authored by Chris Boyd and Brylie Gordon, utilizes a discounted cashflow method for a forward-looking valuation of the kiwifruit property market, alongside direct market comparison. This analysis indicates a downturn in sales activity and values following peak conditions in late 2021 and early 2022, attributed to the challenges mentioned.
Despite a reduced harvest in 2023 due to poor growing conditions, the industry has seen stronger return prices per tray due to low supply. Future projections are more optimistic, with expectations of increased crop volumes in 2024. According to Boyd, orchards sold in late 2022 and early 2023 fetched lower prices than those at the market's peak. He notes a discrepancy in value expectations between buyers and sellers, contributing to low sales volumes. However, with the anticipation of fuller crops for the 2024 harvest, market sentiment is improving, potentially leading to more transactions.
New Zealand's Bay of Plenty region is the largest kiwifruit producer, with Te Puke being a central area. Kiwifruit exports reached $2.9 billion in the year to June 2022, with the European Union, China, and Japan being key markets. The area of kiwifruit cultivation has grown from 12,180 hectares in 2015 to 14,682 hectares in 2023, following the release of the first SunGold license in 2016.
Source: oneroof.co.nz