Australian apple and pear growers are currently facing numerous challenges in the domestic market including pressures around pricing, oversupply, quality, and biosecurity risks like the varroa mite.
There has been lots of press recently on the high price of vegetables, however, this is not the case for apples and pears. Frustratingly, the headlines are full of $12 lettuces and the skyrocketing prices of fruit and vegetables, and yet apple and pear prices remain at the lowest levels in years, with many growers reporting they’re receiving less than the cost of production. Whilst this is tough for growers, it’s never been better for consumers.
In part, this a product of our own success. The 2021 season produced 232,000 Class 1 tonnes of apples, across all varieties, 26 per cent more than in 2020.
In recent times, our industry has invested in new orchards and new varieties but has held on to older, less productive orchard blocks. The combination of new high-density plantings of new club varieties and productivity gains has the potential to consistently provide more Class 1 tonnes in 2022, in 2023 and beyond.
However, there has not been a corresponding reduction in older varieties and the apple market has become oversupplied with unsustainably low wholesale prices. In addition, the pear market continues to struggle with the overhang of fruit once destined for a canning market that has since all but disappeared.
The combination of low wholesale prices, discounting by retailers and low-priced commodity varieties making club varieties look expensive is resulting in poor returns all round for the industry.
We need to refocus on increasing demand to rebalance the market and improve prices. Market research has shown that quality and consistency are key to expanding domestic demand.
On the recommendation of the Strategic Marketing Panel (SMP), Hort Innovation has this season used the marketing levy to fund instore merchandising to improve the consumer experience at point of sale. The improvements already made have shown that improving merchandising has been one of the best investments of apple and pear levies in a long time, and long overdue.
But growing domestic demand alone will not rebalance the market. History shows us that a sustainable healthy domestic market at which prices cover the cost of production is one where Class 1 apple volumes are around 180,000 tonnes, 22 per cent below the volume produced in 2021.
APAL is focused on delivering the initiatives that support improvement – quality, industry data, export access and development, retailer engagement – but there is also a role and an opportunity for every individual grower in this response.
We need to export meaningful volumes of Class 1 tonnes to reduce our dependence on the domestic market, taking supply from packing sheds in all states and quality fruit from growers who have previously deemed export too risky.
We are asking growers to consider their poorest performing blocks and what future, if any, these have. We need to be looking to export and identify where these opportunities lie, and we need to review future production.
With significant increases in growing costs, we’re asking the industry to consider the value that those older, less productive orchard blocks contribute to their business and what future those blocks have. In oversupply situations when prices get pushed too low, growers are the ones who bear the brunt of this, so this is something we want to avoid.
Cassie Whelan
Head of Communications – APAL
