See below for a summary of the biggest trends in the horticulture market, plus an outlook on the next 12 months.

Biggest trends

Strong return on crops

Maturing production and sound Orchard Gate Returns (OGR) have maintained confidence in the market. Strong performance of G3 SunGold Kiwifruit (together with license scarcity) has continued to drive major gains in the value of G3 SunGold blocks.

Growth in cross sector buyers

Buyer interest remains from syndicates, corporates, and existing operators together with an increase in buyers from non-horticulture backgrounds. There has been a growth in buyers driven by change in lifestyle, attracted by the ability to outsource operations enabling a reasonably passive income stream.

Two tier market

Syndicates and corporates are willing to pay for scale with focus on larger production blocks (generally above six canopy hectares). This has created a value gap relative to smaller blocks where syndicates and corporates are less active.

Outlook for the next 12 months

Opportunity in wider horticulture

Suppressed OGR for avocados in recent seasons demonstrates the cyclical nature of commodities. Improved return forecast this season suggests recovery is likely. Lessons from other sectors (e.g. dairy downturn of 2015/2016) suggest excellent buying opportunity in the existing market alongside developing Asian market.

Restrictions on G3 SunGold Kiwifruit licensing

License restrictions this season (350-hectares available versus previous 700-hectares) together with restrictions on bid sizes has further driven scarcity resulting in new record auction prices for new licenses. Constrained supply of licenses will help protect OGR in the longer term.

Higher operational costs balanced by revenue

Increases in labour in recent years have been balanced by improved OGR across all kiwifruit varieties. Returns for both Hayward Green and the new Ruby Red are expected to benefit from the market access created by the G3 SunGold.

Download full report (PDF)