Growers of high quality fruit trees
This will more than double the area already in cherries.
Funded by the New Zealand Fruitgrowers Charitable Trust, Central Otago Winegrowers Association, Seasonal Solutions Cooperative Ltd, Immigration New Zealand and Central Otago District Council, the survey interviewed orchardist and vineyard owners and reported the 56 percent increase on current plantings could be further added to with feasibility studies under way to develop another 495ha of cherries.
More than three-quarters of the new cherry plantings the survey found were planned for near Cromwell, Tarras, Bannockburn and Lindis, 10 percent at Alexandra and the final four percent for the Teviot Valley.
Land suitable for cherries often gets snapped up before it even gets advertised, Cromwell PGG Wrightson Real Estate branch manager Neil Bulling said.
A mix of different buyers was willing to pay about $100,000/ ha for bare land able to grow cherries. They ranged from cashed-up arable and stock farmers in their 50s wanting a lifestyle change to overseas investors. Commercially producing orchards in the area were also hot property.
He said there was little bare land left suitable in Central but there was some still above Queensberry, although the higher altitude and its proximity to the West Coast and summer rain made it less viable.
Availability of water was critical for success with several schemes in the area close to their limits.
“People are after the returns per hectare and they are there if you do it right but you have to do your homework before buying,” he said.
“Everyone thinks it’s easy but it’s not.” Bulling and his wife grew cherries on 4ha for about 14 years but recently sold their orchard.
“We loved doing it but now we’re doing different things,” he said.
“You have to have a minimum of 3ha to make it worthwhile, to make a decent income.”
He said the quick cycle of cherries – they bloom in October and by the end of January/start of February are in Asia for Chinese New Year – attracted many people.
Some orchardists were now using wires to train cherry trees while others were still growing them traditionally as central leaders.
“We should see the results this summer because the first of the trees on wires should be coming into crop.”
Farmlands Real Estate Central Otago agent Dave Varney likened it to kiwifruit in the 1980s.
“Cherries seem to be the flavour of the day.”
He had had enquiries from a range of people wanting land for cherry growing, from private people to a group of Chinese investors last year.
“It seems to be the returns from the investment, the export market for the fruit, that’s driving it.”
Summerfruit chief executive, Marie Dawkins said it wasn’t just New Zealand that was focusing on cherries.
“It’s worldwide for sweet cherries,” she said.
“Chile and other countries are expanding their orchards too and we still can’t meet the demand from Asia, particularly China.”
In the 2017-2018 season, the market value of cherries grown in NZ was $93 million ($84m for exported fruit), with nectarines a distant second at almost $10m. About 4000 tonnes were exported while 10 years ago it was about 1000t. The biggest buyers of our cherries are China and Taiwan, both taking more than 1000t of the fruit each, with Thailand 500t.
“We’re telling growers to budget at the moment on $2.50/kg for peaches and nectarines and about $10/kg for cherries and that’s being quite conservative for cherries,” Dawkins said.
But she cautioned the fruit was high risk.
“It is a rapid growing crop so if you have frosts like you did last week (in mid-October), or rain in the summer you can lose a big chunk of your crop.”
A report Investment Opportunities in the New Zealand Cherry Industry was released in March and has further fuelled investor interest, she said.Commissioned by the Ministry of Business, Innovation and Employment (MBIE) and prepared by Coriolis, it identified the close proximity and access to the East and South-East Asian markets as key to NZ’s cherry success.
Only Chile, Argentina, South Africa and Australia are able to compete with NZ producing cherries for Chinese New Year. However, growing production, especially in Chile where infrastructure costs per hectare were lower, was a threat, the report said.
Some of the reasons limiting the amount of cherries we export were the lack of land availability, low yields per hectare, packhouse inefficiencies and the need to improve the shelf life of the fruit. The grower of 90- 95 percent of NZ’s trees likened the industry to driving a car.
“We’ve been cruising along nicely in first gear through the 1990s and 2000s and now we’re in second with the foot
hard to the floor,” Andy McGrath of McGrath Nurseries said.
He’s stepped up production at his Hamilton nursery more than 400 percent in the past few years to meet demand. The cost of producing trees is high and predicting demand difficult so in a multi-million dollar business he’s cautious – wanting to produce trees to order instead of speculation.
However, that means a two-year wait for buyers. The rootstocks he planted in August and September this year will be delivered to orchards in May and June 2020.
“There are ways to shortcut the process but they don’t produce the high quality trees that we want to,” he said. “People have to realise that they just can’t buy land and then expect the trees to be available to plant straight away.
“I do grow spare trees for replacement of tree deaths each year but this is not the many thousands that new orchards need.” He said as well as more land going into cherry orchards in Central Otago, improved varieties and planting at increased densities to achieve higher yields was also creating more demand for young trees. “The export market is looking for larger and harder fruit for export so as new varieties come onto the market orchardists are replacing older trees. As well, cherry trees only have a certain life. They don’t last forever. “Compared with the rest of the world, I say we’re up with the pace with developing new varieties.” Payment is made for the trees in installments once an order is placed. The increased demand has seen McGrath employ more staff, secure more land and continue to look for new varieties that would be suited to Central Otago and other regions. “I’m passionate about cherries and I think the current growth is sustainable,” he said. “If you plant the trees you can be reasonably certain that you will make money.”