Please accept this Grower Update to the end of week 43 [Sunday 26 October].
We are in the home straight. At the end of last week we were down to 280k class 1 Hayward trays in store with the balance to be loaded out over the next two weeks. At the same time there were 150k trays of class 2 in store with this expected to load out over the next four weeks as we honour our retail commitments in Australia.
The late fruit loss has been lower than expected so while our accumulated loss is a little higher than the Industry average (as a result of the hail) overall losses are very low this season. While we are generally satisfied with our storage results, and will easily exceed our average time-related forecast, some lines have shown elevated fruit loss. We will be working through these issues with the affected growers.
The SeekaFresh program has gone well. The team has deliberately matched supply with demand and has worked hard to deliver great quality fruit to our retail partners alongside a targeted promotional program. SeekaFresh has innovatively delivered new programs targeted at market segments designed to optimise returns to the grower. As an example our organics program has enjoyed good demand. Unsurprisingly, competition in the market has increased with the consolidation of the other New Zealand marketers into Australia and the emergence of a new entrant. This competition has focussed on price in the wholesale market, rather than on quality or promotion. It’s difficult to see how growers have benefited from this approach. Our expectation is that the forecast returns to growers from our SeekaFresh program will increase.
Both of those positive stories have been dwarfed by the increases in returns announced by Zespri. Their average increases are simply astonishing. In case you missed the , the predicted average increases to OGR are:
Hayward +$0.37 per tray to their predicted average OGR $5.71 per tray
Hayward org +$0.45 per tray to their predicted average OGR $6.81 per tray
All Golds +$0.21 per tray to their predicted average OGR $9.57 per tray
G14 +$0.05 per tray to their predicted average OGR $6.95 per tray
Your Grower Entities team will now move to re-work your forecast with a target of having this to you by 14 November 2014. Please note that these are averages and individual forecasts are important.
The statistics as at End Wk 43
Hayward Conventional
Seeka Packed: 17,054,522 trays Industry 69,798,811 trays [Seeka 24.4%]
Average reject rate: 17.69% Average size 33.12
Seeka fruit loss to date 2.38% Industry fruit loss to date: 1.63%
In store 280,334 trays
On order week 44 212,866 trays
On order week 45 63,022 trays
The green pool balance is currently at positive $1,975,192 [$0.115/ submit tray or $0.15/time pool tray]
Hayward Organic
Seeka Packed: 975,494 trays Industry 3,565,431 trays [Seeka 27.4%]
Average reject rate: 24.52% Average size 35.33
Seeka fruit loss to date 1.73% Industry fruit loss to date: 1.02%
In store 0 trays
The green pool balance is currently at negative $53,988 [$0.055/ submit tray]
2015 Pricing
Seeka will shortly announce its 2015 Post-Harvest Pricing having discussed and agreed the schedule with the Seeka Growers Council. The current pricing is a little “fluid” as some matters, like changing pack differentials and base pack type, have yet to be finalised at an industry level and these have a fundamental influence on the packing price we charge. The Council has agreed to a mechanism that allows pricing consistent with 2014, but also allows our pack price to change as a consequence of any industry changes to the pack diff and assumed base pack type that we are pricing for.
We note that a number of post-harvest companies have been talking up post-harvest prices for 2015 and we have indeed absorbed a number of significant inflationary costs. However, we are also conscious that there is still significant uncertainty in growers lives: the effects of Psa in the coming season, crop volumes and also the issues raised in the KISP report. Consequently we believe you are best served by a competitive post-harvest sector and it is our intention to provide you with a competitive pricing model.
As always Seeka strives to deliver to our growers a professional service underpinned with technical advice, an enjoyable relationship and quality performance at a great price.
Grower Share Plan
Finally, let me extend my welcome to new Seeka shareholders. In case you missed the recent stakeholder update Seeka has announced an 8 cent dividend (i.e. 8 cents per share) payable to all shareholders who were on the share register at 5pm 7th November. This will be paid on 13th November. It is fully imputed which means it is largely tax paid.
We also have a dividend reinvestment plan [DRP] which allows shareholders to use their dividend to purchase more Seeka shares without incurring broking costs. This scheme is available to the current dividend and letters to new shareholders inviting them to consider participating in the DRP have been sent. Thank you for your support.
Kind regards
Michael
Seeka Key
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