Welcome to 2021. It’s our pleasure to wish you all every success, wealth, health and happiness for the year ahead. And we hope you have all had a great Christmas with your friends and family. It’s not too far to go before harvest again comes around.
There are lots of challenges in front of us in 2021 which we have to plan for and adapt to. Our situation, dominated by COVID, remains dynamic and even more challenging than 2020. Ahead of us:
Increased inflation and labour shortage – the cost of labour is increasing, the labour supply is tight and the cost of RSE labour sky-rocketing. Seeka has secured some 217 of the 2000 RSE allocation from the Pacific Islands. The cost of these people in addition to the 87 secured through joint ventures with other produce companies increases the cost of getting each of these people by $6,200 before we even pay them wages for working. For us it’s just insurance, while we are advertising and actively seeking more New Zealanders, we need to have the security of having enough people to run a timely harvest for our growers and skilled kiwifruit workers for winter pruning and orchard work. Costs are going up. While growers won’t want to hear it – it’s a fact – on top of this the replacement labour is unskilled, slower and taking longer to come to speed. Costs for manual jobs are up by 30%.
Shipping is challenging – there are issues in getting access to containers, and lead times are increasing. Vessels are not calling where or when they are scheduled to and it’s making the importation and export of goods and produce challenging. We have just experienced it with our avocado program, and while 80% of our product just goes to Australia, nearly every vessel has had some disruption. This level of supply chain disruption is likely to continue for some time.
Market demand – market demand is dynamic. Countries remain in lockdown and their demand habits, food service demand and shopping practices are changing. Hopefully kiwifruit with its nutritious characteristics and health benefits can surmount the changes.
China supply – China continues to update food safety protocols that require us to comply to be able to supply this market. The compliance adds more to the cost to supply.
Risk of further COVID outbreaks – potentially of the more infectious variants. Our planning team has revised our infectious diseases policy and our COVID response committee that prepared Seeka so well in 2020, is again preparing contingency plans for the different scenario’s we may face. Keeping our teams safe and operational is their focus.
Information technology breakdown – this risk which really hit maturity testing in 2020, remains for 2021. New software systems are being written now, are behind their milestone waypoints and will be pretty much rolled out straight into harvest, when there is peak demand for these systems.
On the more positive side, the crops look fantastic. Both the SunGold and Hayward varieties look excellent, and there has been a lot of money invested by growers in their crops and what will be presented for harvest. The new imagery system and information provided by Fruitometry has been a game changer for many growers, enabling them to visually assess those areas overloaded and direct thinning resource to those areas that really need it. That technology is a game changer.
Our Round 1 monitor data is in (and available from your client relationship manager). Unsurprisingly, dry matter for both Sungold and Hayward are slightly behind last year reflecting a wetter season in most regions. Fruit size is higher than last year, with Kerikeri and Hawkes Bay Sungold smaller than the other regions. Pleasingly – it looks like Katikati region has bounced back and the fruit size is better than last year.
And I guess while there is the potential for things to go wrong, there is also the opportunity that we plan for them, adapt our plans, deploy and mitigate the risk.
February progress payment
Growers who requested maturity tests from Eurofins in 2020 will be having the costs of these tests deducted from their February progress payment.
These charges would usually be charged in September/October. However, due to the Eurofins withdrawal of services in 2020 these charges have been in dispute. The Industry Advisory Council, a sub committee of the Zespri Board, (IAC) has determined clearances charges that meet the criteria (as below) will be charged to growers.
Any samples which received a result In Specification. In Specification means:
Growers who received a kiwistart payment for fruit picked on or before the 26 March will be charged a minimum of 1 x passed sample which the fruit was picked on regardless of reporting timeframes. For clarification if all the samples requested by a Grower for a maturity area that was picked on or before Friday 26 March were outside the specifications above will be charged for the one passed sample that allowed them to receive a kiwistart payment with the uplifted kiwistart rates.
Where in the world is Fred….
Our Chair is cycling the length of New Zealand raising money for Alzheimer’s and is currently up to $13,603! You can track his actual progress here and you can track is financial progress at this link.
Go Fred go!
Kind regards
Michael
Seeka Key
Contacts