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Solid OGR in challenging year
5 May 2019

New Zealand’s avocado export leader, AVOCO, has delivered a solid Orchard Gate Return at the end of a season marred by fruit quality challenges and signs of increasing global competition.

Last month AVOCO’s 800-plus avocado growers received their Pool Statements and final payments for the 2018-19 season. The OGR was expected to come under pressure due to costs associated with salvaging an export season impacted by rots, wind rub and the consequences of advanced fruit maturity that led to disappointing packouts for growers across the industry. But a financial analysis revealed enough upside to reward growers for their continued support.

It’s been six years since fruit marketers Southern Produce and Primor Produce joined forces to form AVOCO and export their combined supply of avocados to Australia and Asia. Since then, AVOCO has established strong relationships with Australia’s largest supermarket businesses, ensuring its growers can make the most of opportunities across the Tasman by supplying both retail and wholesale markets. The company has also led the way with ongoing market development in Asia where fruit is marketed under its highly regarded AVANZA brand.

AVOCO marketing and communications manager Steve Trickett says the company’s scale and proven business model meant it could “weather the storm” and successfully navigate its way to the end of what was a “rocky” season for fruit quality and crop size.

Export volumes fell short of pre-season estimates by around 20% due to the challenging growing season and harvest period. Western Australian supply was also greater than forecast and ran much later, adding to the pressures faced by New Zealand exporters in the Australian market at critical times.

Generally inconsistent fruit quality throughout the season meant AVOCO invested heavily in repacking in Australia to ensure only the best quality avocados reached retail customers.

“We had anticipated that these costs would impact the OGR but pleasingly, we’ve secured a final return for growers that illustrates how supplying AVOCO’s network of premium customers across Australia and Asia can hold up the value of their fruit,” says Steve.

Last season, AVOCO exported 1.87 million trays, or 63% of the industry’s export volume. Next season’s New Zealand crop will be larger, but not the ‘bumper’ harvest earlier predicted. Early estimates suggest the total industry crop will be up somewhere between 20- 25%, resulting in an indicative forecast volume of between 3.5 million and 3.8 million trays.

To ensure the viability of next season’s export crop, AVOCO is re-examining fruit handling processes at every step in the supply chain, starting with growers, and working with staff across the six packhouses supplying AVOCO to improve fruit quality.

Within Australia, AVOCO’s importer-handlers located in New South Wales, Queensland and Victoria are further refining their integrated clearance processes and operations to ensure the most efficient clearance and delivery timeline possible from port to warehouse, helping mitigate quality risks associated with fruit age.

Industry body NZ Avocado Industry Ltd is also making fruit quality a priority and is collaborating with AVOCO’s technical and quality team to ensure planned research and trial project work being undertaken is harmonised and not duplicated.

With Chile wanting to export avocados to Australia and many Asian markets now highly competitive export environments due to the increasing awareness and popularity of avocados, AVOCO and its growers need to adhere to orchard management best practice more than ever to preserve quality and secure premium values, says Steve.

“To unlock our potential as an industry, we’re asking everyone, including our growers, to step up and improve their performance by re-visiting their management practices and orchard inputs including optimum spray programmes.

“It’s essential that we respond to these challenges with proven orchard management strategies and commit to research to learn even more.”

 

 

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