eNews Kiwifruit March 2023 Edition

John Lewitt
Head of Operations and Logistics

The season so far

We started our packing season on the 2nd of March with RubyRed in Packhouse 1. We have almost completed all of our RubyRed packing for the season, with only 1 KPIN remaining to pack. Our total volume of RubyRed packed this season will end up at around 40,000 trays, which is more than double the volume we packed last season.

The SunGold harvest season has started extremely slowly, with the industry only having packed just over 11 million trays of fruit compared with nearly 30 million trays at the same time last year. This has been very frustrating for both us and our seasonal staff as we are currently only operating with six of our eight shifts, and even then, they are only working part days, a few days a week.

In the build up to the season, staff numbers are looking good, and we have filled up all eight of our shifts. We hope these potential staff stay in the region as we still have 17 million trays of fruit to pack this season.

We started running our new automated packing system in Packhouse 4 on Friday the 24th of March and hope to have it running to its optimum by the time we are running at full capacity.

While Trevelyan’s has only packed around 800,000 trays of fruit so far this season, the fruit that has arrived on site has been in a good condition, with low levels of explosives and low levels of physical damage cuts. We are hopeful this trend will continue for the remainder of KiwiStart and through main pack. We are very appreciative of the efforts by harvest contractors and growers to ensure that fruit arrives ready for packing in the best condition possible.

Debbie Robinson
Head of Supply

The Zespri board 2023 estimated OGR guidance

The Zespri Board recently announced early guidance on grower returns for the 2023 season.

Growers should note that the guidance range outlined below is based on an estimated Class 1 crop of around 145 million trays this season. The 2023 per tray OGR indications are above 2022 season returns, with the upper band of the ranges reflecting the investment we’re continuing to make to help build strong market demand, improved pricing from reduced volumes this season and the expected improvements in fruit quality, driven by the work being undertaken across the industry as part of the Quality Action Plan. The lower band of the forecast reflects the potential for ongoing costs associated with quality, as well as inflationary pressures – both onshore and in-market. There also remains some uncertainty on the overall crop and orchard yields for the coming season given recent weather challenges, including the impact of frost and Cyclone Gabrielle. There is a likelihood for many growers that their actual OGR per hectare results will be outside these estimated ranges, particularly for impacted growers and Red growers with a wide variety of orchards at varying levels of vine maturity.

As this season’s fruit volumes and quality is better understood, further updates will be provided regarding OGRs, the initial 2023/24 corporate profit range and dividend estimates.

NB: OGR per hectare ranges are industry averages, based on current producing hectares and associated average yields data and may change significantly once crop volumes and producing orchard data is finalised. Per hectare results this season will vary across growers due to the impact of weather events. For Red growers, per hectare OGRs are also likely to be variable due to the impact of vine maturity on yields and profile.

Increased 2023 Grower Submit Payments

Zespri have increased the amount of submit paid this season to assist with grower cashflows. The full $0.30 and $0.15 increases per submitted trays will be paid through to HW and HE growers, respectively. GA and RSCK growers will receive $0.15 per submitted tray, with $0.15 paid to TPCL for packing.

The table below shows the increased submit, and the deductions made from the submit payments for interim packing charges which are paid to Trevelyan Pack and Cool Ltd.

Pranoy Pal
Kiwifruit Technical Manager

Best harvest practices for optimum quality outcomes

Fruit quality has been one of the key concerns in the 2021 and 2022 seasons. For the 2022 season, the impact on returns was significant, with the quality-cost to growers at ~$2.80 per tray for conventional Gold3, compared to $1.68 in 2021. For conventional Hayward, quality costs were ~$1.95 per tray, compared to $1.65 in 2021. Zespri is collaborating with industry partners to understand, take action and make sure Zespri provides customers with consistently high-quality kiwifruit. A Quality Action Plan has been developed by the Industry Advisory Council (IAC), focused on ensuring that only high-quality fruit is delivered to our markets, and targeting fruit loss and costs returning to reasonable levels. The industry has also reduced KiwiStart rates and increased time rates to support good-storing fruit as part of a move to rebalance KiwiStart and Mainpack returns. While these efforts are focussed on growing the best quality fruit and optimum harvest practices, efforts are also underway to maintain post-harvest fruit quality.

Making the decision to harvest your crop can be a complicated process. Zespri has developed a number of resources to assist with decision making – for more information click here.

Just a few other things to think about as harvest is upon us:

1) Lift low hanging fruit – anything lower than 1.5m is likely to make contact with sprayers/tractors/harvest bins which can result in cut, split or bruised fruit. This damage mostly cannot be seen at packing and turns into “rots” and “softs” once packed. These defects cannot be tolerated in the market and reducing them starts with the grower and harvest contractor.

2) Check your sprinkler heads – fruit stain caused by irrigation water can be problematic. Irrigation heads that are too high, have been broken and/or knocked sideways can result in water spraying vertically or diagonally, wetting the fruit. Water sources that are high in heavy metals such as iron or manganese may cause staining on fruit. This type of stain can be extremely difficult to remove, with clean-up sprays often being ineffective – so prevention is the best option. Prevent this type of stain from occurring in the first place by ensuring irrigation heads are set level, and not too high so water is not making contact with fruit.

3) Several vines have had an adverse effect due to ‘wet feet’ and caused phytophthora infections as a consequence. Identify those unhealthy vines by hanging visual markers (ribbons or tape) on them and inform samplers and pickers not to sample from these vines.

4) Shake the vines – there are reports of fruit drop occurring on all Red19, Gold3 and Hayward already! Fruit drop is an indicator of explosive or overripe fruit at harvest time, a major contributor to NPFG (Alternaria) and a fruit major quality issue for the markets. Shaking vines immediately prior to harvest helps reduce the number of explosive/overripe fruit in the picking bin.

5) Enter your fruitset date and sprays in Spray Diary now – this allows you to run Spray Diary “Test” Audits to make sure everything is passing well before harvest (and fix any errors!). The Zespri Crop Protection Standard defines the fruitset date as “When 90% of flowers have set (it generally occurs 2-3 days after full bloom)”. Talk to your Grower Services Representative if you have any concerns or Spray Diary Test Audit fails.

6) Self-auditing your picking gang – removing fruit juice and damaged fruit has been shown to be key in maintaining postharvest fruit quality. Recent research (watch here; videos 2, 3 and 9) has shown that using juice-contaminated picking bags or gloves can act as the ‘food source’ for microbial growth i.e. non-pathogenic fungal growth (NPFG). Juice on a glove can contaminate the next 100 fruit picked. Research also showed that Gold3 fruit dropped into bins or onto other fruit resulted in many out-of-grade fruits due to softs and soft patch defects. The fruit took >5 days to show damage, so couldn’t be seen during packing.

7) Maintaining hygiene at picking – Fruit juice from explosive and overripe fruit is the root cause of NPFG in storage. Recent research (watch here; videos 2, 3 and 9) demonstrates the importance of hygiene at picking. The industry is also coming up with other ideas to keep juice away from the picked bins, such as:

• Not using the conventional cotton gloves (It is no longer a requirement for pickers to wear gloves for the 2023 season). Picking without gloves can help identify and discard soft fruit.If you choose not to use gloves, ensure that fingernails are short, rings are removed and that there is strict hand hygiene in place.
• Washing and/or sanitising hands if a picker comes into contact with fresh juice.
• Cleaning the picking bucket if fruit has exploded in it.
• Using ‘washable’ bucket liners in the picking buckets. These liners are available from the same manufacturer of the commonly used picking buckets that can be bought in New Zealand.

For more information on Zespri harvest criteria, refer to the “Zespri Need to Know 16: 2023 Harvest clearance and weight bands information pack for Gold, Green and Red varieties” available here. 

Bex Astwood
Organic Category Manager

Organic crop estimates and Kiwistart rates

Welcome to the March newsletter, where we are (slowly) getting back into the swing of harvest. So, what have we got in store?

Crop estimates:

• Industry wide, GAOB is estimated at 2.4 million trays, which works out to be 8,592 trays/hectare compared to 3.1 million trays or 10,870 trays/hectare for 2022. HWOB is estimated at 2.6 million trays, working out to 5,760 trays/hectare compared to 3.2 million trays or 7,000 trays/hectare in 2022.
• This year at Trevelyan’s, we have 1.2 million trays and an average of 10,648 trays/hectare for GAOB and 200,000 trays and an average of 5,837 trays/hectare for HWOB.

Kiwistart rates for GAOB:

We are all aware that the maturity of fruit has been delayed this season, with only 13,718 trays of GAOB being submitted by March 26th. This equals 2% of the FPP demand cap. As such, an ISG paper has been produced recommending that Kiwistart rates should slide back by a week to reflect TZG/dry matter scores. The paper also recommends that the Week 14/15 Kiwistart rate cut- off date is amended to align with the Procurement Plan of GA1CK, which has a cut-off of 13 Apr instead of 11 April. This paper was approved on Monday the 26th of March. Following the issue of this paper, another paper was issued and approved on the 30th of March, which increased the rates again. The new rates can be seen below:

Zespri SunGold Organic average Kiwistart rates – proposed vs current

We had the first COKA meeting of the year this month, with Glen Arrowsmith and Teresa Whitehead attending from Zespri. They discussed:

• The delay of the Mutual Recognition Arrangement (MRA) for organic product certification with China, which affects all New Zealand organic produce. Although this may delay the China Organics program, Zespri’s solution, is to revert the certification process, that was previously used with China last season.
• The 2023 OGR Guidance was published in the Zespri Chairman’s update. The OGR guidance is $11-$13.50 per tray and $94,000 – $116,000 per ha for GAOB, and $9-$11 per tray and $51,000-$63,000 per ha for HWOB. Although these are a guide, they are above the 2022 season returns and represent the focus and effort being put towards fruit quality this season.
• In response to the drop in volume this season, Zespri is prioritizing the high- value markets. This results in a reduced volume going into Europe, with high-value markets receiving similar volumes to previous years which will maximise potential OGR.

We also had Leanne Stewart, CEO of Kiwifruit Vine Health (KVH), as a guest speaker. She updated us on the new phase of Psa management for the industry when the 10-year plan finishes next month and provided an update about response compensation for organic growers. It was previously noted that growers would only be paid ‘direct costs’ associated with a biosecurity event. However, this compensation principle has since changed and MPI now works on a ‘like for like’ basis, meaning any grower who is subject to official response activities will receive compensation, so they are in no worse a position than before the response. In practice this means that if a non-organic spray needs to be used and an orchard lost organic status then a calculation would be made to compensate the grower for the difference between sale of conventional status fruit and organic fruit while the grower is working towards regaining their organic accreditation. This is great news for all organic growers!

Wishing you all the best for the season, and I will be in touch soon.

Sarah Lei
Head of Sustainability

Sustainable finance

Trevelyan’s have been working to improve our sustainability outcomes for over a decade. At the beginning of 2023, we made a significant commitment to a more sustainable future by agreeing to a Sustainability Linked Loan (SLL) with our banking partner ASB.

Over the last five years, Trevelyan’s have invested in additional land to expand the site, built conventional and controlled atmosphere cool stores, and added more packing and automation capacity to handle the increasing Sun Gold crop. Funding for these projects has come from reinvesting the company’s profits, alongside extra borrowings from ASB.

Sustainability-linked loans (SLLs) aim to facilitate environmentally and socially sustainable economic activity and growth. They do so by aligning the loan terms to the borrower’s performance, which is measured using one or more sustainability targets.

The targets must be:

• Relevant, core and material to the borrower’s overall business, and of high strategic significance to the borrower’s current and future operations;
• Measurable or quantifiable on a consistent methodological basis; and
• Able to be benchmarked (i.e. using an external reference or definitions to ensure a high level of ambition).

Trevelyan’s have been working with ASB and Deloitte to develop three specific Sustainable Finance Targets. If we meet these targets, we will get a discount on the amount of interest we pay on our loans.

The three targets we have agreed on are:

1. Waste – Achieve at least a 10% annual reduction in landfill waste associated with the packing and transport of fruit, using 2021 as a baseline.
2. Carbon Emissions – Achieve at least a 2.5% annual reduction in our carbon emissions from fuel, refrigerant losses and electricity per kilotonne of fruit received, using 2021 as a baseline
3. Wellness – Achieve the Gold Workwell Accreditation

Based on our current term borrowings, achievement of the agreed targets will enable Trevelyan’s to achieve a reasonable saving in interest costs over the next three years.

The targets we have set are extremely challenging and we need everyone’s help to get us over the line. We ask everyone who comes on-site to make sure that they take away any landfill waste brought with them and to take care to put recycling in the correct bin. We are implementing initiatives to use less fuel, save electricity and prevent refrigerant leaks. Workwell is a comprehensive program that supports the wellness and wellbeing of all our employees.

We hope that these targets will help us achieve our wider kaupapa (purpose) – growing a better future for our people, our environment and our industry.

References

https://www.lsta.org/content/sustainability-linked-loan-principles-sllp/

Colin Olesen
TGL Chair

Personal safety, food safety, cash flow, and contracts

I firstly want to extend our thoughts and best wishes to our Trevelyan Growers who have experienced loss during Cyclone Gabrielle. I am informed that it is one thing to see the devastation on the television screen, but quite another to be there on the ground to see and smell it. The restoration and fix, in many cases, will take years not months. The kiwifruit industry’s major focus has been on the welfare of our Growers, and, in the coming weeks of harvest, the focus must also be on the food safety element to ensure that only safe fruit is packed and delivered to market. The Zespri brand must be protected from unwanted, or even unwarranted, accusations concerning food safety.

Your Directors considered the remaining cash flow from the 2022 harvest of the Hayward conventional and organic varieties, with a desired outcome of having no clawbacks required on payments made. To achieve this, it was decided to pay 5 cents of the Zespri 10 cent loyalty payment in the March fruit payment and pay the remaining 5 cents when assurance is obtained that clawbacks for any Trevelyan Grower have been covered.

The Trevelyan (TPCL) packing agreement has been sent to all Trevelyan Growers, with the Trevelyan (TGL) Supply Agreement still to be finalised – hopefully in your hands for signing by the time you read this page. Please attend to the signing of both agreements promptly, as this will assist the Grower Liaison team in their work.

I wish you all a safe and high-quality harvest.

Colin Olesen – Chair

Grower agreements

Trevelyan’s kiwifruit growers will have received an email with a link to the 2023 Kiwifruit Packing Agreement from agreements@trevelyan.co.nz. We want to remind our growers to sign these agreements as soon as possible.

Alongside the agreement is a PowerPoint showing how to electronically sign your agreement on our Growers Portal.

If you have not received an email with a link to your agreement, please let your grower representative know.