Kiwifruit hanging on the vines ready for harvest. Photo: 123RF
Kiwifruit orchard prices have plummeted 30 percent, with sales stalling in the prime growing region of Bay of Plenty.
Te Puke-based PGG rural real estate consultant Stan Robb said there were virtually no buyers around, and sellers were still asking unrealistically high prices.
Zespri's recent poor performance, high interest rates and on-orchard costs - which have gone up 50 percent in the past year - are all impacting the market, Robb said.
"There are very, very few buyers around. But… vendors' expectations are still up with where they were this time last year.
"I sold 18 orchards in 2 months last year, I think for a total of $150 million. And they averaged around about $1.8 million per canopy hectare for the gold, and $700,000 for green per hectare. Now, I would say you'd be lucky with $1.4m for gold, and maybe $450,000 for green.
"But there are no buyers out there at the moment and nothing's selling - very, very little as sold."
Robb, who has been in the industry 35 years, has witnessed at least five major price drops.
Many buyers were waiting to see how much the sungold kiwifruit licence would sell for next month, he said.
Robb was expecting the average licence price last year of about $800,000 per hectare could be well down, which immediately lowered an existing orchard's value.
He said it was still a great industry to be in, because purchasers could buy a property and lease it back to a packhouse to manage, but the rule of thumb had been a 10 percent return on investment.
"And certainly on the green kiwifruit on today's prices, what they are getting per tray, well, values have got to come back dramatically to achieve a 10 percent return. And with the gold you've got to come back to at least the $1.4 million per canopy hectare."