As we rapidly approach the holiday period the most asked question has been – “when will domestic prices start to rise”?
Generally I am never short of an answer; some would say that I have too many opinions! Yet when faced with this specific question I am somewhat on the fence with my response.
Two months ago, based off the export flow-plan I would have said values should potentially lift by mid-January. However recent extended harvest intentions would indicate that mid to late February may be a more accurate prediction.
In recent weeks we have seen packing levels that can only be described as heavy. This packing has generated a mixture of higher than forecast small fruit volumes combined with a significant oversupply of Class 3 fruit. At times the weekly Class 3 component has accounted for 30% of domestic supply. In theory, if the export flow-plan is extended, then we should see that reflected very quickly in weekly packed volumes and potentially that could result in a value lift if demand stays high and incoming volumes don’t meet consumer demand in what is likely to be a strong sales period.
Another angle worth considering is that if volumes remain heavy into late January and February then it is possible that we may see a continuation of current pricing levels into the New Year. We will be watching the packed data weekly and if the opportunity exists, have no doubt that we will look to maximise value for you at the earliest opportunity.
On a positive note our last market report tabled the option of developing a New Zealand Class 1 supply programme. The response has been outstandingly positive from growers. Our clear challenge is to develop innovative options for the respective fruit grades which we pack. During 2019 Zeafruit marketed Class 1 product when the domestic market provided a better return option and conversely we released Class 2 and Class 3 product when export markets provided opportunities to maximise returns.
Make no mistake, we believe the future of the avocado industry will require changes from the current norms. Markets exist worldwide, including New Zealand for viable Class 1, 2 and 3 programmes. Are we bold enough to engage in developing new strategies aimed at enriching grower financial returns?