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"NZ grower has gains offset by rising costs"

It is fair to assume growers supplying greenhouse vegetables into the wholesale markets have achieved higher returns than may have been expected. Prices are usually already on a decline as volumes increase due to the natural light and temperature inclines. In the supermarket, prices of some produce have stayed higher than in the same periods in past years, which indicates that volumes are lower than expected. Other factors, including food service reopening due to easing of covid-19 restrictions, may have contributed to high prices being maintained. 

As an industry, we depend heavily on materials that can only be supplied by international manufacturers. The two big-ticket items that require substantial container space are substrates and fertilizers.  There are many other items, such as clips, acids, hygiene products, and chemicals that are also critical. When talking with growers from both the North and South Islands, three major issues are pointed out: the increased cost of transporting the product, containers arriving on time and to the correct ports, and the general cost increase of the products. All three are huge issues that will gobble up almost any gains achieved until some key issues are addressed.

That shipping costs have gone up astronomically since the beginning of covid is understandable, with the delays being totally beyond growers' control. The price of containers has become approximately 3-4 times more expensive than pre covid prices. The additional cost of shipping only increases the cost of production, which means the people to ultimately pay the price will be the consumer.

Containers arriving months later than expected, sometimes to different ports nowhere near the usual destination, have created additional and unexpected transport costs for businesses. 

Gains achieved by growers are already being swallowed up by other operational increases. If shipping issues are not addressed with urgency, this will be another cost to bear.

Read the complete article at www.grower2grower.co.nz.

 


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