Market update | May 2021
The 2021 harvest is well underway with predictions of a record crop of approximately 177 million trays, 18 million trays higher than the previous season. Most of the increase is the result of maturing Gold plantings along with the new Red production. Zespri reported a strong start to the season with Gold sales well ahead of volumes at the same time last year.
The forecast for the 2020/21 payment was updated upwards again in February reflecting continued positive momentum and returns exceeding the 2019/20 payment.
Zespri is keeping its license release programme unchanged and this year has released for tender 700 ha SunGold, 50 ha Organic Gold and 350 ha Zespri Red as planned, which are expected once again to be oversubscribed.
The successful winners of this year’s annual licence round were due to be confirmed and we understand there has been strong demand for both SunGold and Red licence areas and anecdotally it appears SunGold licence values will be higher than $500 thousand per hectare.
Agents report a shortage of listings and strong inquiry on properties brought to the market.
The overall volume of sales is down as orchard owners hold onto properties and enjoy the strong returns rather than realise the value to consider alternative investments. The lowered cost of capital and the performance of the kiwifruit sector has reflected lower investment yields which are consistent with the trends of other commercial investments in the current environment.
The prices paid continue to show an upward market trend reflecting the current demand along with a compression of the margins between immature and mature orchards that reduce the development margins in an environment of increasing licence costs.
For more historical data go to:dairy, sheep & beef, viticulture, arable and kiwifruit markets.