Please accept this update to our growers and stakeholders up to Week 42. Our 2016 kiwifruit programme is entering its final stages with the Hayward conventional fruit in store down to 1.03m trays and the Hayward organic at 7,700 trays. There are orders for 441k Hayward trays to be shipped over the next 2 weeks. As we reach the final stages of this season, our attention focusses on next year.
There are some dramatic changes. Already we know that the Hayward conventional bud-break is very patchy. Flowering will be prolonged. Volumes will be down. The Industry commentators [rather than operators] are already predicting a decrease of 25% to 30% in the Hayward conventional crop – but we will see as we close in on fruit set. In the case of SunGold – orchards are not as floral as last year and there has been some incidence of flower drop and bud abortion. There was a lot of thinning in 2016, and the early opinion is perhaps while less floral there may be less impact on volume.
It’s certainly going to change the equation as many operators have committed to constructing coolstores ahead of a predicted volume increase. They are now wondering what the capacity equation looks like? With many operators across the industry carrying higher debts loads.
Last week Zespri decided to implement a change the Hayward conventional taste threshold and mechanism. Zespri approved the changes ahead of the IAC meeting, subject to the IAC endorsing them. There were three changes made:
1. The MTS has changed to 15.5% for 70% of the sample (move away from average)
2. A smoother curve between payments and dry matter levels
3. Increasing the maximum taste payment to 60%
Seeka having discussed the recommendations with the Seeka Grower Council, voted against recommendation 1 and 3 along with a number of other suppliers. While everyone agrees with the sentiment of delivering the best tasting crop possible, quite simply, our growers were not convinced that the changes last year have had enough time to take effect. Along with the climate which had been shown to impact on dry matter, we were concerned that some catchments may struggle on certain years to deliver the minimum – so what happens to their crop ?
Until recently there have been no reports of poor tasting Hayward, and the real market feedback has been on the coincidence of a late start and very high volume – in the case of the later we can already tell you we don’t have this for next year with confidence.
And to the numbers at midnight Sunday end of week 42 [23/10/2016]
Capital Projects for 2017
Our 2017 capital projects are well underway with coolstores and pre-coolers at KKP, Transcool and Main Road. A new eight lane packing machine is being installed at Main Road with the existing six lane Main Road machine being moved and installed at Peninsula. The new planned machine for KKP has been deferred until 2017 for 2018.
Zespri Forecasts
Zespri issued new OGR forecasts last week and our entity team is working through converting the forecast into a new forecast for you. However, the numbers are startling. We tend to focus on the fruit value and kiwistart components of the forecast only as these reflect the returns from the market and the other costs are our own and we accurately predicted these in the first forecast.
So at this level:
Change in Fruit Value and Kiwi Start Value
Hayward conventional down by $0.23 per tray
Hayward organic up by $0.14 per tray
G3 SunGold down by $0.35 per tray
Hort 16a up by $0.26 per tray
Our team is working through this and will get our forecast out to you as soon as possible.
Kind regards
Michael
Seeka Key
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