Rockit chief executive Mark O’Donnell says the apple firm was heading for a bumper year.
The Hawke’s Bay firm, which sells its tiny apples in about 30 countries, was expecting to be packing about 40,000 bins this season, O’Donnell said.
New trees were coming on. This was meant to be Rockit’s largest crop yet.
But damage wrought by Cyclone Gabrielle O’Donnell estimates at between 10,000 and 20,000 bins of apples. It will still be a larger crop than last year, but not what had been hoped for, he said.
This small-than-expected crop means the company will pull back on capital projects. Less fruit means less need for investment in the packhouse, for example.
O’Donnell was out surveying orchards on Thursday. He said the scale of the damage in Hawke’s Bay wasn’t really understood outside of the region.
The Rockit harvest started the Friday before Cyclone Gabrielle, and it will continue through until April.
O’Donnell said the packhouse was back operating, and Rockit has fruit to pick and ship.
It has a lot of fruit around Havelock North and Hastings, as well as operations in the US, Europe and Asia.
O’Donnell said its 200 full time staff were currently part of a booming operation, with about 200 temporary workers doing two shifts in the packhouse, and another 500 in the orchard when picking was at its peak.
A boost in seasonal worker numbers has helped to fill its roles, and backpackers are back, he said.
But while Rockit has fruit and work to do, O’Donnell is worried about other growers who have been wiped out.
He said there is a need for another wage subsidy for horticulture workers, and struggling firms need financial support and practical support, such as to clear silt from their land.
The Government has announced $25 million in grants for farmers and growers, including grants of $2,000 per hectare up to a maximum of $40,000 to remove silt from trees and vines.
Prime Minister Chris Hipkins has said he won't rule out a wage subsidy.
Rockit is one of many counting the cost of Gabrielle.
Listed firms were totalling the damage on the NZX on Thursday morning; Comvita said it would likely write-off its Hawke's Bay facility. Kiwifruit firm Seeka said it was assessing its Hawke's Bay crops.
Horticulture is a large contributor to the region, accounting for about 10% of Hawke’s Bay’s gross domestic product.
Westpac Bank agri economist Nathan Penny said the impact on horticulture from Cyclone Gabrielle "is big".
He said Hawke’s Bay is responsible for about 2.8% of New Zealand's gross domestic product, but roughly two-thirds of New Zealand’s apple production. The timing of the storm comes bang in apple season, which means the apple crop has been hit particularly hard.
“We don’t have a number but we expect a massive fall in the crop. We have heard from growers who are close to writing off the whole lot. One whole season’s worth may be gone for some growers.”
He said nectarines and peaches would be less affected as they were a summer, earlier crop fruit.
Kiwifruit, grapes and avocados would also be hit too.
Penny said the livestock industry will be hampered by damaged infrastructure and problems with supplying water to stock because of the flooding. Milestones could also be missed in raising animals which might mean additional spending on drenches and animal treatments.
In positive news for the region, the Affco freezing works at Wairoa will be open next week, he said.
And O’Donnell said despite the setbacks, Rockit is charging ahead.
It has three of its biggest customers coming from Asia next week.
“We’ve got our global sales team coming from the US, Europe, China, Vietnam and the Middle East to be here as well. It’s important to get the message out that there is so much good quality still to come out of Hawke’s Bay, and what an amazing fruit bowl this region is."
63 Comments
Imagine if businesses actually planned for contingencies, rather than expecting to be bailed out whenever things don't go to plan.
Yes, this is a pretty major contingency, but we can't keep throwing money around every time yearly earnings end up merely "[bigger] than last year", rather than "what had been hoped for".
Surely orchards have insurance against weather events?
I wonder what their insurance payout will be for? I suppose I could ask my uncle, who lost his entire kumara crop a few weeks ago.
If the crop in insured, surely then revenue is insured? So continual payment of workers should be a non-issue. I imagine for vegatables it's a different issue with now requiring to purchase new seed as well, but how many trees did the orchards actually lose vs just crop?
If the insurance covers the revenue, and they need to clear silt, well then the workers can just clear silt instead of harvest the non-existent crop.
I note also that he says they need a handout otherwise there will be "reduced capital expenditure" - so he wants to continue expansion rather than pay workers, with the tax-payers picking up the tab?
No, it’s just orchard owners sticking their hands out for some free money. The justification for the wage subsidy during covid was the government forcibly locked down the country and people couldn’t operate their business. It was designed to compensate them and ensure they didn’t fire all their workers (who couldn’t get a new job).
What is the justification for a paying a wage subsidy, when the interruption to orchards isn’t caused by a decision by the government? Why would the government be paying a wage subsidy when workers will be highly in demand and be easily find work in the region?
I believe there should be government support to the regions impacted, but it needs to be more targeted and appropriate than a blanket wage subsidy. This should be ensuring businesses don’t collapse, not to ensue they maintain their profitability during a severe weather event (they have been highly profitable in the last few years and they should be able to absorb much of costs of the cyclone damage).
Yeah, this is just the philosophical decline of the right wing in NZ to more of a selfish "welfare for me, own two feet for thee" mentality. Seems to have become a hallmark in the last 2-3 decades. Folk always with their hands out, but always ranting about socialism yada yada yada when help goes to poorer folk.
Sadly, every time there is some sort of weather event, rural businesses expect a handout from taxpayers. Weather events are a risk of farming/growing businesses - they need to plan and insure accordingly.
The Covid wage subsidy, as shockingly expensive and poorly policed as it was, unfortunately normalises such expectations.
Haha. Nil chance.
After Orrs comments this about labour either having to reallocate existing budget or raise taxes to pay for infrastructure rebuild... or if they spend new cash...be responsible for bigger ocr rises. And today we have more inflation coming from more rain, china-russia-wagner&co and mad cows in brazil.
Labou now have to limited cash so have to choose carefully which voters to please and which they are willing to lose.
For sure they will fall back on their core voter groups. Cancel 3 waters and other big projects.. and cancel all mid projects in national heartlands.
Point is that Orr has said the government cannot keep spending without increasing inflation, which will mean he will raise the OCR and cause pain for the voters - and he will blame the government for spending.
So - if the government wants to spend to fix the roads, do a managed retreat for the climate and cyclone damage then. they have to stop spending somewhere else. And given the scale of the rebuild it means big projects will be chopped.
personally i agree with the 3Water idea. long term it will save money. properly governed it needs to go ahead. the govt just cant pay for itl and everything else now.
a) Pretty much any business you care to name in the good times = ''Keep away from us Mr Government, we don't want a bar of your interference/regulation/tax raising, we operate strictly in the free market so JUST LET US BE FREE......''
b) Pretty much any business you care to name when in the bad times = ''Oh please Mr Government, you have to help us, we are dying here, give us all the handouts you can''.
The irony of it all never seems to sink in..................
Very true
A lot of businesses have made a lot of money in the last few years
You just need to go down to the boat ramp and see all the new boats being towed by utes that display tradesmen signs
But hang on I can’t sell my boat or my batch that would a step too far, the govt will have to help me!!
Mike Hosking has been bringing ministers on his show all week and pushing them to bail out farmers with the usual "we feed the world" and "bring billions in export earnings in NZ".
Apply the same logic that right-wing critics do to tax increases and one could argue that the general public/taxpayer is already taking a hit from these weather events from lower economic output and tax revenue on agriculture.
Speaking of free,..
The following is why labour is wrong with it's equality bullctap ..
A society that puts equality - in the sense of equality of outcome - ahead of freedom will end up with neither equality or freedom. The use of force to achieve equality will destroy freedom. On the other hand, a society that puts freedom first will, as a happy by-product, end up with both greater freedom and greater equality. Freedom means diversity but also mobility. It preserves the opportunity for today's less well off to become tomorrow's rich, and in the process, enables almost everyone, from top to bottom, to enjoy a richer and fuller life.
Milton Friedman
What exact freedoms are you talking about?
If you don't precisely define them, it just sounds like USA big business oligarchy talking points. The wealthy wanting more freedom to extract ever more value from the poor via monopolistic behaviour. The opposite of mobility and equality.
Happens when governments favour one factor of production (capital) over another (labour). Isn't the inflation problem right now a result of too much cheap capital floating around in the market without enough labour supply and productivity?
Governments around the world are being forced by business lobbies to intervene now that the market pricing is tipping in favour of labour over capital (wage-price spiral).
Exactly, so ironic.
some of these business owners bash welfare beneficiaries then are happy to put their hands out when they need it.
Like someone who comments on this website.
oh they will argue that this is an act of god, while beneficiaries are just lazy. And while that has some truth to it, it ignores that many beneficiaries are where they are through no fault of their own.
Noting many of the comments, my first impression is that I do agree that the Government possibly needs to help, but it is a big question. Currently we are, as a nation, all questioning earlier choices. The flood plains which many are now saying should be no-go areas actually have much of our richest soils, simply because they are flood plains. I can't see a total no-go attitude being practical.
FEck off!
you rich orchardists should take your million dollar profits and invest in insurance to cover lost earnings.
I had employment insurance back in the day.
How much "equity in your business" will you guys give us rate/ tax payers if we subsidize your organization!!!
Stop bludging off the tax payer and sell a Porsche or three!
We all make bad decisions but most of us live with the repercussions of our decisions and don't use the old "hairy chestnut" "climate change" for continued stupidity aka living in known flood planes.
The issue isn’t that they are using flood planes, it’s actually pretty good use of that land. The issue is that the land is way too overpriced considering it’s a flood plane and hence the orchids don’t have the profit buffer they should have to mitigate these events. I’m sure that land price will be coming way down now, but it won’t help the existing businesses.
I have checked their flood hazard maps, and much of the land has not been surveyed for flooding. Yet I have heard some of these areas referred to as 'Flood Plain' so it looks like it was known that they would flood in the future. Infact I heard them discussing this on the radio and that in the 1800's there are B&W photos in the National Library of the same areas with houses with silt up to to the roof. Also this one in 1930's https://www.nzherald.co.nz/hawkes-bay-today/news/losing-sight-of-histor… . So such flooding has occurred before in some of these areas. It was a known risk for many. I personally refuse to buy a house that is in any flood hazard area (rivers or the sea) or one that is in an area hasn't been surveyed and has in the past flooded. I am not sure why others aren't doing this.
Something I don't understand about Rockit. They sell 4 little appies in a plastic tube on shelves across Asia at a premium while NZTE, etc harp on about sustainabilty. Mixed messages. South African apples are selling at a much more agreeable price point. Cosmetically less sexy but once you try it, the price-value equation works.
While this is a terrible time for the orchards/farm workers I do not believe a wage subsidy is the solution.
We still have record low unemployment and the job market is incredibly tight. A wage subsidy is not the solution; these workers will have no problem finding employment elsewhere.
Most economists have been stating that unemploment needs to rise to curtail inflation so it would be counterintuitive to then subsidize an entire industry workworce.
Many of these workers seem to have been brought into NZ for picking. Are they paid lower than the minimum wage, or paid at the minimum wage? It is certainly a tough situation for the workers. They could work on the roads, or other clean up work. But much will need machinery and skilled people diving them. Or they could be delayed to other areas in NZ that need pickers. But I understand the Reserve Bank are wanting unemployment to rise as maximum employment is unsustainable
The way I read the article Mr Rockit wasn`t so concerned about himself but other growers need help.
If you look at past floods on fertile flood plains this helps build up fertility and moves with time,the issue has definitely been exacerbated by other practices upstream,just like the city slicker problems with people changing around them.
i`m more concerned about areas that have done previous work now having to pick up the tab for those who have undercapitalised in times past spending their money on nice to haves instead of the three water infrastructure and now we will all be lumped in together in four entities across the country to pay for others again
The silt is the next generations topsoil delivered all at once, unfortunately. That's how nature works sometimes.
I hope like hell firewood is cheap as chips in the H/Bay this winter.
As for central govt; they need to fix up the roading network - & pronto. That's their job. The big infrastructure boys need to fix their stuff up (oops, pun not intended) & the local councils need to put in better storm water drainage systems (including maintaining them) for the future. That's all you can do after a once in a lifetime blow. Learn from it & make it better for next time.
Will it happen again? Sure it will. Then that generation will need to upgrade that system etc.
As for the orchardists, well, they may need to sell the odd boat or so for cash flow reasons, but generally speaking, they're a pretty resilient lot. Sure, they'll try to con the govt. Why wouldn't you with this lot in power making beneficiaries out of everyone. However, if they see them looking after the workers they'll generally be fine with that.
Please government can you take all the risk out of my business enterprise?
Adverse weather is a risk for all farming. If you didn't know that, you shouldn't be in business. Government provides safety net for those employed when your business fails, not a safety net for preventing your business from failing.
If there is some sort of subsidy, it should be a small percentage, maybe 10% max.
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