Welcome to the Week 39 Update.
Our SunGold shipping programme is all but complete. Seeka finished its China programme in week 39, and only has a small amount of non-China inventory remaining to ship. The fruitloss statistics for this variety remain low and time related earning are higher than were budgeted; this has been an excellent outcome.
The last of the Hayward CA [controlled atmosphere] finishes packing this week. Our CA programme has packed out well with an average of 1.30% storage loss. The CA inventory has allowed us to optimise our resources and has ensured Seeka supplied the last of the conventionally packed SunGold China orders in the required week while meeting our Hayward order commitments.
The European shipping programme completes this week for SunGold and Hayward. Seeka has only the Hayward variety on this vessel. Fruitloss statistics for Hayward are slightly higher than the industry and compared to last week the average time earnings increased by $0.04 across all trays.
For the Hayward Organics Seeka fruit loss is higher than industry average and reflects a low kiwistart market share. Time related earnings totals sum $0.33 per tray.
To the numbers [as at midnight 2 October]
Seeka’s Taste Submission – as it was submitted
Seeka Growers and Seeka does not believe that the changes from the taste review late in 2015 have had sufficient time to have fully influenced the taste profile of the crop. There has not been any analysis, market data or proof that the changes made last year have or have not had good effect. Changes to taste compensation may as a result be premature. Seeka would note that issues with taste were not raised at the recent Zespri Annual Grower meeting.
Seeka’s supplying growers support delivering our industries customers great tasting fruit and on financially differentiating those growers that can achieve the desired taste goals. But excluding some growers fruit through using a less than perfect and subjective taste standard is not supported. History has shown that there have been issues with consistency in dry matter results in the testing process and there is a lack of confidence that the sample results truly reflect a growers dry matter. Any exclusion of a grower’s fruit from inventory must be based on robust sampling and dry matter calculations. Some growers have questioned how this can occur within the current monopsony structure.
There is no acceptable plan to accommodate the fruit that does not meet the revised standard and many of Seeka’s growers believe that the changes being suggested by Zespri are a surrogate for crop management. The preference would be either to increase the pressure on Zespri to deliver profitable sales for Hayward or find a far more efficient system of removing crop when the industry volume is too much for the market to economically sustain. Seeka continues to receive feedback that the industry would benefit from a far more vibrant collaborative marketing sector than currently exists. This is a position that Seeka endorses.
Zespri presented their perspective to the taste Committee that change was necessary to ensure a market mix which had the highest amount of fruit being sold in the highest returning markets. We are, however concerned that this assessment was based on anecdotal evidence without supporting market research.
Seeka Growers support recommendation 1, only if the increase in the MTS made late in 2015 is shown to be insufficient to positively affect the TZG. There is strong negative feedback by the Waihi growers to this recommendation as they have experienced low dry matter averages this year, compared to high dry matters in the previous year. These growers deployed the same orchard practices with markedly different year on year results. One of the hypotheses is that the weather may have been one of the contributing factors in this outcome.
Seeka Growers support recommendation 2, and along with the changes made in late 2015, it is our view that this sends a message to growers and addresses the challenge for change raised by Zespri.
It is our opinion that until the impact of recommendation 1 and 2 and last year’s decision to move the maximum taste payment [MTP] to 50% is known there should be not further change. We do not support recommendation 3 to increase the MTP percentage and we do not support making a commitment today to changing this percentage in the future.
Outcomes form on orchard change takes time. Seeka Growers believe that recommendation 1 and 2 along with the 2015 taste review changes sends a strong signal to growers of the importance of high dry matter fruit.
Farewell to Daphne
We are sad to advise that Daphne Price, long time grower and supporter of Seeka, passed peacefully on Friday after a short illness.
Daphne will be known to many of you through her interaction with Seeka or many of our grower events. Indeed our recent meetings feel a lot less eventful in her absence. She has been a great friend to many in the community and the Company and a strong supporter and advocate of ours. She will be sadly missed.
A service for Daphne will be held on Wednesday 5 October at the Te Puke Citizens Club starting at 2pm.
Regards
Michael
Seeka Key
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