Horticulture earnings break $5 billion mark

$300m leap in exports drives record year for growing industry.
 
Auckland, New Zealand, 15th May 2008  – New Zealand's horticulture industry has recorded its highest ever annual returns, with latest figures showing  fruit, vegetables, wine and flowers earned a combined $5.2 billion in the year to June 2007. In 2006 the industry earned $4.8b.
 
The figures, published today by HortResearch in the 2007 edition of its annual industry update 'Fresh Facts', confirm continued growth in the sector, which has increased overall returns every year since 1980.
 
HortResearch and industry analysts Martech Consulting found export returns for 2007 topped $2.67b (fob), up from $2.36b in 2006. Returns from the domestic market were estimated at $2.56b, compared with $2.5b in 2006.
 
Fresh fruit remains our largest horticultural export sector, with revenues of $1.2b, mostly from kiwifruit ($765m) and apples ($343m).
 
The largest increase in export produce returns came from fresh vegetables, which raised revenue by over $55m dollars to a total of $260m, largely thanks to a big increase in returns from onions.
 
Wine recorded the biggest increase of all export sectors, earning $695m over the period, up from $510m.
 
Wine now accounts for 26% of horticultural exports, just 3% less than long-term industry leader kiwifruit.
 
HortResearch Acting Chief Executive Dr Bruce Campbell says wine has been closing the gap on kiwifruit for some time.
 
"In 2005 kiwifruit earned 31% of industry export revenue, and wine just 19%. Kiwifruit returns remain incredibly valuable for New Zealand and it is great that we now have two mega-players in our industry.
 
"It's not just good for horticulture, but also for the wider New Zealand economy. It shows what can be achieved when our unique climate and productive landscapes are teamed with passion, innovation and commercial drive."
 
Dr Campbell says he expects more horticulture sectors to achieve high levels of growth over the next 10 years.
 
"Horticulture is a very focused industry. We've proved New Zealand can lead the world in quality, innovation and environmental responsibility and were continuing to build on that reputation.
 
"By 2020 New Zealand's horticulture sector should be returning upwards of $10 billion each year with an increasing component coming from exports."
 
Growth will be driven by the continued introduction of new and novel fruits and vegetables that earn a premium over offshore competitors, through the development of high-value foods derived from fresh produce and by a concerted effort to ensure New Zealand produce continues to sets the standard on sustainability and food safety.
 
"$10b is an ambitious target, but a realistic one. It will certainly require energy and commitment, as well as investment in everything from research and technology to plant and equipment. However, horticulture in New Zealand is very cohesive and quite capable of achieving this kind of pan-industry goal."
 
Success will bring many spin-off benefits to all New Zealand, not just those involved in horticulture, says Dr Campbell.
 
"The increased tax revenue alone would be significant, plus the investment required for capital equipment and support infrastructure will ensure a significant proportion of new earnings flow swiftly through to the wider economy.
 
"The geographical spread of horticultural enterprise across New Zealand will also ensure much of the additional revenue is spent within rural communities and therefore contributes to regional development in those areas."
 
Dr Campbell also sees benefits for New Zealand's "Global brand image".
 
"We export produce and wine to 121 different countries. Those exports are high value, often niche products. Many are highly innovative and closely associated by consumers with health, purity and everything 'clean and green'. That means that every time a global consumer buys produce from New Zealand we are reinforcing our nation's international branding as an exclusive supplier of high quality foods with first-class environmental credentials".
 
New Zealand Horticulture – Key Figures
(All figures quoted in this release are for the year ended 30 June 2007)

• $5.2 billion in total receipts
• $2.6 billion in exports (fob)
• $1.3 billion from fresh and processed fruit exports
• $565 million from fresh and processed vegetable exports
• $300m increase in exports from 2006 to 2007
• Industry target of $10 sector by 2020
• Exports reach 121 countries worldwide
• Horticulture now earns 8% of merchandise exports
• Total crop area 118,035 hectares
• On-farm investment exceeds $14 billion
• Off-farm investment approaching $24 billion

A full PDF of Fresh Facts is available on the HortResearch website http://www.hortresearch.co.nz/index/page/498

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