Frankly Speaking

The unsettled weather pattern has continued with several frosts at the beginning of the week and then rain back again at the end of the week.  Despite this the teams have been busy; with the Gold3 harvest in the Bay now complete, the Hayward organic supply cap closing and the focus on the Hayward conventional harvest. Thankfully Seeka is well through its Hayward conventional harvest and approaching 70% complete, and we appreciate our growers having made their crops available to put us in this position.

Dry matter levels for some Hayward conventional and organic maturity areas continue to be a concern.  For some of these maturity areas the canopies have been frosted and leaf breakdown is occurring, which will inhibit the ability of these vines to accumulate any further dry matter. The lower dry matter levels in Hayward have been accentuated by Zespri lifting the dry matter threshold this year. Industry monitor data suggests that there may be 1m trays of Hayward conventional fruit which could fall below the minimum taste standard [MTS] and more alarmingly for Hayward organic up to 600K trays. This is particularly concerning in the case of organic where 20% of the fruit may miss the threshold. It has made us question not only the threshold, but also the appropriateness of this mechanism in Hayward.  Zespri has put several options to the industry to address this issue, these are;

1. Not accepting any fruit below the MTS into inventory [so the grower gets no value for any of the fruit they have grown]
2. A non-standard supply option for fruit which achieves the 2016 MTS but doesn’t meet the 2017 MTS threshold;
   1. qualifying trays paid a fruit value the same as the class 1 payment with a zero taste payment
   2. qualifying trays paid 50% of the August forecast value 

[this means that growers will receive a very low payment for their fruit – probably at or below the cost of growing]

In contemplating this there are a number of issues which must be considered;

1. Can Zespri commercially discriminate using dry matter, and does this meet the requirements of the Regulations?
2. Were these consequences intended when the MTS was changed from an average to a threshold?
3. Fruit that was above the MTS last year was successfully sold in a high volume year. Why can’t this fruit get a class 1 return in a low volume year?
4. Are we placing too much reliance on the dry matter result from a fruit sample this year?  Noting that the performance of the single testing supplier has been very variable with results bouncing all over the place. Are we absolutely sure that a pass is a pass?
5. It seems that now the Industry accepts that dry matter is a function of weather patterns, average sunshine hours and rain. So the economic outcome of a grower is not based on growing technique but the weather?

This will be discussed by the industry over the next few days with a resolution expected on Friday. Seeka has commissioned some legal review of the mechanism to better understand its compliance with the Regulations. We are fundamentally concerned about the severe financial impact this threshold can have on growers through no fault of their own.

The 2016 season May progress payment has been approved by Seeka Growers for distribution on the 31^st of May.

To the numbers: [to midnight Sunday 28 May]

SunGold [CN&OB]

50% shipped

Hayward Conventional

70% submitted

Hayward Organic

35% packed

This week at the NZKGI forum [Thursday 1 June] there will be a workshop to review Period 1.  Debbie Oakley is the Seeka grower representative, if you have a view you would like taken to the meeting please let Debbie know.  Debbie would like growers to know that you are welcome to attend NZKGI meetings to personally give your views on the issues being discussed by the forum. 

Safe harvesting

Regards

Michael