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Buying a Kiwifruit Orchard, there are two rules.
The kiwifruit industry is in a confident phase at present, with a renewal of young vine plantings of Hayward and restricted plantings of the patented variety Zespri Gold This renewed confidence has seen kiwifruit property values double since 1998.
Buying an orchard is about forecasting future profits. Profit in kiwifruit is a very simple formula. It is price times yield per hectare. Therefore there are only two rules, (questions to ask yourself), when buying an orchard.
- What is the "realistic" future price ?
The sole responsibility for guessing future prices belongs to the orchard owner. Marketers, mates, accountants, bankers & bartenders can advise, often with good wisdom, but in the end it is solely the owner's job. It is not easy. Listen to Bill Fletcher, kiwfruit and citrus specialist, in December 1959, " There was a marked decline in the rate of planting chinese gooseberries during last year, because of increasing awareness of the risks of overproduction." Production was expected to exceed 100,000 trays within a few years !!
The key point is not to be too pessimistic nor too optimistic. This is not easy. It takes hard thinking.
- What is the "realistic" yield per hectare ?
The industry average yield is about 6,000 trays per hectare, some do worse and others exceed this by 1.5 to 2 times. Then there is adverse event climate risk to allow for. Specialist advice can be valuable here. The climate risks of an orchard needs to be analysed with care. Many orchards can improve their production from getting the basics such as pruning and pollination done better A record of the last 10 year's production is essential to view before buying. Beware overestimation of yield in young orchards.
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