Monday, 20 May 2019 10:50

Cherry picking the right investment

Written by  Pam Tipa
MyFarm national sales manager Grant Payton. MyFarm national sales manager Grant Payton.

New Zealand's horticultural sector must compete on quality, taste and branding because it will never compete globally on volume and price, says MyFarm national sales manager Grant Payton.

For its 80ha cherry business in Central Otago, MyFarm is working with Freshmax to identify high quality varieties which are protected and have their own specific market niches, Payton told a recent MyFarm seminar in Auckland

“Freshmax are not commodity traders, they are high value traders of premium food.”

MyFarm head of investment research Con Williams says NZ will always be a boutique producer so it must focus on high quality in a specific niche. The PVR (plant variety rights) story is very important, he says.

When asked about Chile ramping up cherry production, Payton said Chile is pouring a lot of money into marketing.

“We are coming in on the back of that with a better quality product,” he says. “They are almost opening up new opportunities for us.”

Freshmax representative Jim Tarawa says there have been recent examples with cherries and other products where different markets have opened up to a larger share of imports. 

“Everyone thinks it is the end of the world because there is more competition.”

But Tarawa says these new producers pour money into promoting consumption and making consumers more aware of the product. The market doesn’t get smaller for NZ, it gets bigger.

Con Williams says cherries are probably only 1% of the fruit bowl at present. 

The comments arose when MyFarm was outlining the $19.9 million Central Cherry Orchard Ltd Partnership with Freshmax in the Waikerikeri Valley. Freshmax will develop, manage, export and market the fruit from 72,000 trees to be planted in the next three years.

NZ is a niche producer of high quality sweet cherries for the main festive season in Asia – the Chinese New Year.

Asked about labour, Payton says MyFarm syndicates are investing in accommodation for cherry orchards and hop gardens (in Nelson) because they recognise the need make the businesses attractive places to work. 

The Central Cherry partnership is looking at booking out backpacker accommodation for the whole summer. It is also growing varieties that will result in a staggered harvest over six-eight weeks, reducing peak labour requirements. 

Too heavy, man

On the topic of what comes next for MyFarm, Payton answered a question on medical marijuana, saying they had done initial research but “didn’t get too heavy into it”.

“Legislation has probably stopped us getting into that right now. My gut feeling is we have missed that market because Australia is so much further ahead than we are. It is something we are monitoring.”

That includes whether it becomes a more mainstream farming option in NZ.

“We are also looking at glasshouse production,” he says. “We need to intensify. Environmentally there are many reasons to go into glasshouses. It is not cheap but medical marijuana might be quite suited to glasshouse production.”

 

More like this

Investor targets hort

An investment fund launched by MyFarm is aimed at helping ‘serious’ investors tap into the burgeoning horticulture sector.

Hort boosts farm syndicate’s result

An aggregate 10% cash return during 2018-19 is shown in the first full year financial results of MyFarm’s horticultural and commercial rural property syndicates.

MyFarm investigates viticulture sector

The past six years has seen increased growth in the New Zealand viticultural sector, according to MyFarm Investments, but future long-term growth will depend on other varietals outside Marlborough Sauvignon Blanc.

Punter goes cherry picking

It is not always the fastest-growing or biggest returns which influence decisions on investment in various sectors, says MyFarm head of research Con Williams.

 
 

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