Frankly Speaking Week 7
The El Nino weather pattern is in full effect. The expected long dry periods have in reality culminated in regular rain, cyclones, heavy seas and lots of wind. Last night Te Puke experienced about 40mm of rain (76 mm in the last 3 days) and there are reports of between 10 and 70 mm from Coromandel to Opotiki.
Key points in this update:
Payments to Growers – last week the Seeka Growers Council met and approved payments to growers. Substantial payments were made across all varieties as shown below:
|
Hayward Conventional |
$0.483 average per tray |
|
Hayward Organic |
$0.568 average per tray |
|
G14 Sweetgreen |
$0.205 average per tray |
|
G3 SunGold |
$0.292 average per tray |
|
G9 Charm |
$0.488 average per tray |
In addition a further payment totalling $2.148m is being distributed today to those growers negatively affected by the insurance claim. This includes a distribution of SeekaFresh returns and the first distribution of insurance monies. It is a partial distribution arising from the first claim however we continue to work with the Insurers to resolve the complete claim. Payment advices will be mailed tonight.
2016 Post Harvest Contract – the Seeka Growers Council also reviewed and endorsed the proposed Post-Harvest contract for 2016. This season Seeka has again worked to keep price increases to a minimum. The contract is now with CRM’s who will be bringing it to you in the near future. Importantly, 2016 is the final year of Seeka’s innovative grower share scheme.
Industry matters - the Industry has been working through mechanisms for supply in 2016 and it is very important that you are aware of the positions that we and others have been taking on your behalf:
2016 Time Rates – Seeka is of the opinion that the time rate mechanism works correctly but the quantum currently paid does not adequately compensate growers for the risk they take in harvesting fruit after the Kiwistart period. Kiwistart growers receive up-front compensation payments for potential lost growth and assume minimal risk since they are assured of load-out by week 24 at the latest. Our opinion reflects the view of the Seeka Growers Council.
Seeka has advocated for increased compensation to be paid to main-pack growers without changing the premiums for Kiwistart. We consider main-pack Hayward growers to be shouldering excessive risk because the season is expected to go very late to allow sale of the predicted large volume of fruit. Surprisingly, Seeka was the only voice pushing for this increase and voted against a proposal that would see rates reduce. Even more surprisingly to us, KGI voted to reduce the Hayward rates. I encourage you to discuss this matter with your local KGI representative or with your Seeka Growers Council members if your views differ from theirs. It is going to be interesting to see how this matter is settled when approximately 25% of the supply is against the change.
2016 Capacity Projects – our projects are all on track. New pre-coolers at both KKP and Main Road are scheduled to be ready for the commencement of the season with the coolstores ready around the middle of May. 9000 plastic bins have been delivered and assembled and so are ready to go for the season.
Crop Volume – We are holding our crop estimate at 28.2m trays. We do have further packing and coolstore capacity above this volume in case we need it due to higher volumes or unsettled weather through the harvest. Thank you to our growers that are working to deliver a clean crop.
Murray Judd recently held a Field Day on seasonal crop trends which I summarise below.
Our feedback is that the Hayward crop is a little variable (particularly at altitude) and consequently many growers are undertaking their third thin right across the catchment – it has been an expensive year to be growing in 2016. Dry matters are low but increasing and size is mid to low. As a result we have backed off our forecast volume from last year’s record yields but we still expect yields to be very good. Minimum taste standards will give some new complexity to harvest [now 15.5% for HW]. Seeka has not changed its reject charges policy and accordingly we really appreciate your efforts to present a clean crop. Given the inevitably increasing costs of production we hope growers can look forward to superb returns from our marketer Zespri.
In the case of G3 [SunGold], it is going to be a very complex harvest. Crops look excellent, fruit is large and clean. In case you didn’t get to a recent Zespri seminar or to Murrays Field Day explaining the changes I am outlining them for you.
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All clearance samples will consist of 90 (random) plus 60 (small) fruit this season.
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70% of fruit in each count size must exceed the 15.9% minimum dry matter to be cleared for Class I harvest.
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TZG and colour values will be calculated for each count size from each G3 harvest sample. There is a minimum colour protocol and DM for clearance for harvest.
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The payment for taste (TZG) will be on based on the FOBS volume [so you will only be paid TZG for the fruit delivered to the wharf rather than submitted into inventory]. The specific TZG value calculated for each count size will (eventually) be applied to your shipped trays in that size.
The early sampling has indicated that this is a large size year with good volumes. Dry matters are a little low but it may well be a seasonal variation and so may catch up. [Seasonal variations is the common term used by technical people when they cannot explain a phenomenon]. Accurate Lab testing this year is going to be really important for an orderly harvest and thankfully Tracy and the team at VLS are geared up and ready for you.
Picking Contract – for those of you who use a Seeka contractor for harvest – the rates have been negotiated with the picking contractors and included in the Post-harvest services contract. Contractors have only sought a very modest increases for Hayward and actually decreased the bin rate for G3. Thank you.
Kiwiberry Harvest – expected to start in the next 7 to 10 days. Crops look excellent!
Thanks. I will be back to you in the next week.
Kind regards
Michael
