Tasmanian Dept Primary Industry (DPIWE)

Industry Profile

TASMANIAN STONE FRUIT INDUSTRY INTRODUCTION

This industry sector covers the production of apricots, cherries, peaches/nectarines, European/Japanese plums. Production is focussed on the fresh fruit market and takes advantage of Tasmania’s late season of production (latest production season in Australia) and natural quarantine advantages (e.g. area freedom from fruit fly).

The Tasmanian stone fruit industry has undergone considerable change in both production and structure since 1980. Before 1980 the industry had contracted from its peak prior to 1945, when the industry, predominantly growing apricots, supplied a major processor in the south of the State. The decline in production up to 1980 paralleled the decline in the processing industry. There is now no major processing industry in Tasmania.
Since 1980 the industry has restructured to supply fresh fruit to the fresh fruit market. As well as supplying local market demand, the industry also extends the availability of fresh produce to major mainland markets. In 2002/03 approximately 10% of the marketed sweet cherry crop was exported. Markets included Hong Kong, Taiwan, Thailand, Singapore, UK, Europe and USA. Trial shipments of apricots have also been exported to the UK.

All recent orchard plantings have been at high plant densities using varieties specific to the fresh fruit market. Much of the expansion has occurred through newcomers entering the industry, with only limited expansion undertaken by traditional growers. A recent trend has been the establishment of cherry orchards by traditional apple growers as an increasing trend towards diversification.

Although relatively small by mainland standards, the Tasmanian industry is significant in terms of the fresh fruits market and export potential.

STONE FRUIT PRODUCTION BY STATE (tonnes), 1999

Note: * The production of peaches and apricots includes processing.
Source: ABS agricultural commodity data, Stone Fruit Industry surveys

ABS data shows that total stone fruit production in Tasmania was 570 tonnes in 1999. However, production estimates from industry surveys and DPIWE statistics indicates production of around 1,200 tonnes. (Due to the manner in which ABS figures are derived, smaller producers and new developments are not included in the statistics.)

The growth in investment in stone fruits in Tasmania is highlighted by tree planting statistics, derived from a grower survey conducted by the State’s peak industry body, the Tasmanian Stone Fruit Association.

TREE NUMBERS

Source: Tasmanian Stone Fruit Association survey, February 2001.
The Tasmanian stone fruit production season commences early in December with early-maturing cherry varieties, and peaks during January and February with the bulk of the cherry and apricot harvest. Late peaches, nectarines and plums extend the season into March and early April.
The Tasmanian Stone Fruit Association, in collaboration with the national stone fruit peak industry body, Summerfruits Australia, has developed a generic quality assurance system for Tasmanian growers based on SQF 1000 and 2000. To date, about 20% of growers have received training and some 10% of producers have on-farm, accredited systems. Most producers, currently not implementing on-farm quality assurance, market as approved suppliers, under the quality assurance systems of wholesalers, agents and packers.

INDUSTRY STRUCTURE

PRODUCTION SECTOR

Cherries and apricots are the main stone fruit crops grown in Tasmania. Except for apricots, stone fruits are grown commercially in most regions of the State including: Huon/Channel, south-east districts (including the Coal River Valley), Derwent Valley, Tamar Region, east coast and north-west coast. Apricot production is restricted to the south-east district and lower Derwent Valley region because of their particular climatic needs during flowering. Cherries are grown in all regions with the main production region occurring south of Hobart (Huon/Channel districts). Significant plantings of cherries are occurring in the Derwent Valley to capitalise on that region’s lower summer rainfall. Peaches, nectarines and plums are grown mainly in the Tamar Valley and Coal River Valley.

There are more than 100 orchardists (full-time or part-time) growing stone fruits. Although 70% of current growers have production units less than two hectares in size, several significant investments involving orchards in excess of 20 hectares have occurred during the past five years. These include: Tasmanian Cherry Company and Reid and Sons in the Derwent Valley; Hansen's Orchards and Tas Valley Orchards in the Huon; Zenith Universal in the Tamar and Huon Regions; Red Night and Qew Orchards in the Coal River Valley.

PROCESSING SECTOR

There is no major processing outlet for stone fruits in Tasmania. Some on-farm processing is being done to produce jams, chutneys and fruit juices. Production of boutique products (jams, preserves, fruit ice-creams, sorbets, etc.) is providing an outlet for some second-grade stone fruit by companies such as Doran’s Fine Foods, Emma’s Choice, Tasmanian Fine Ice-cream.

MARKETS

Tasmania’s season of production for cherries and apricots is the latest in Australia. The main competition for ‘late’ Tasmanian fruit comes from New Zealand. Late market opportunities on the mainland are being exploited by the Tasmanian industry, and there is scope for further expansion to meet this market demand. In addition, Tasmania’s unique position of having ‘area freedom status’ for fruit fly presents an opportunity to export stone fruits into South-East Asian and Northern Hemisphere markets. Currently about 90% of the fresh fruit produced in Tasmania is sold on the Australian domestic market. The remaining 10% is sold overseas (Taiwan, Thailand, UK, Europe, USA).

However, the situation with cherries and apricots is changing with production predicted to increase rapidly. Significant market opportunities for fresh Tasmanian cherries and apricots exist within Australia. Woolworth’s Australia Ltd has been negotiating with the Tasmanian stone fruit industry to be its major supplier of late season produce throughout Australia. Currently New Zealand is the major supplier for late season cherries and apricots to Woolworth’s Supermarket chains.

ESTIMATE OF DIRECT SALES OF TASMANIAN STONE FRUIT SOLD IN AUSTRALIA, 2002

INFRASTRUCTURE

The stone fruit industry is essentially self-regulating. In 1986 the industry formed a grower’s organisation, the Tasmanian Stone Fruit Association (TSA). This organisation is affiliated with two national industry bodies, Cherry Growers Australia and Summerfruits Australia. The Tasmanian Stone Fruit Association has a membership of about 80% of the State’s stone fruit growers, and has developed a close working relationship with DPIWE for delivering research, development and extension to growers.
The industry is a levy-paying industry with levies collected at the point-of-sale. Industry levies are matched by Commonwealth Government funds and contribute to a national research, development and extension and marketing program. In 1998 the Tasmanian industry began funding a half-time Industry Development Officer. This position is now a full-time position funded through Tasmanian Stone Fruit Association, Summerfruits Australia and Horticulture Australia Limited. DPIWE provides office and administration support for this position at the Grove Research Station.
Stone fruits, and in particular cherries, are capital intensive industries with establishment costs per hectare ranging from $40,000 to $60,000 (trees, irrigation, land preparation, machinery). Additional costs for cherries include bird-proof netting ($8,000–30,000 per hectare for temporary versus permanent netting) and $60,000–100,000 per hectare for rain-protective covers. Packing sheds with grading and cool room facilities represent a further capital outlay varying from $40,000 to $500,000, depending on scale of operation.
Cooperatives for the sharing of facilities do not exist but many smaller-scale producers rely on larger growers/packers to grade, pack and market their fruit. Currently there are six larger ‘sheds’ that pack and market for smaller producers. Most produce sold interstate is freighted via sea–road refrigerated containers. Freight rates are reasonable and the service is now daily since the introduction of the twin ferries across Bass Strait. Fruit marketed overseas is normally sea–road transported to Tullamarine Airport.

GOVERNMENT INPUT AND INVOLVEMENT: REGULATION

There are no specific Acts or Regulations that relate to this industry, though quarantine requirements apply to imports and exports, with exports also covered by the Commonwealth Export Control Act 1982.

RESEARCH, DEVELOPMENT, AND EXTENSION

Between 1984 and 1992, the Tasmanian Government invested about $1 million in the industry in a program designed to revitalise the industry and change its direction from a dependency on processing to a fresh fruit market base. The industry is currently served through the Horticulture Branch of DPIWE, plus analytical and laboratory inputs, and cooperative research with the Tasmanian Institute of Agricultural Research.
Research, demonstrations, workshops and field days are conducted at the Grove Research Station and growers’ properties, and are usually conducted as cooperative ventures by DPIWE and Tasmanian Stone Fruit Association.
The Quarantine Branch of DPIWE, acting on behalf of Australian Quarantine and Inspection Service, is responsible for ensuring that area freedom status for fruit fly is maintained, and in addition provides inspection and certification of pack houses for export purposes.

INDUSTRY VALUE

The stone fruit industry, in particular cherries and apricots, has undergone considerable growth since the early 1980s. In 1980 there were five commercial cherry growers and about 15 commercial but small apricot producers. In 2003 there are more than 120 commercial cherry growers and four large commercial apricot producers. Many trees are young and yet to bear fruit and new trees are continuing to be planted.

Note:
*DPIWE or Industry survey.
^ There is also a substantial seasonal labour requirement for picking fruit.
Source: ABS agricultural commodity data, DPIWE industry surveys.
Further production of cherries and apricots is likely to rise quickly as young trees planted during the last five years come into production. The following table provides estimates of likely industry growth, based on current tree numbers. No provision is made for future tree planting trends.

EXPECTED INDUSTRY GROWTH, 1999/00 – 2005

OPPORTUNITIES

• Many market opportunities exist for fresh Tasmanian stone fruits and are under-exploited. A considerable quantity of fruit still enters Tasmania that could be produced locally. Mainland markets (Melbourne, Sydney, Adelaide and Brisbane) are also well under-supplied with produce during Tasmania’s peak period of production.
• Cherries and apricots are the stone fruit crops with the greatest potential for development in Tasmania. Both crops have a clear, late season production advantage both within Australia and overseas.
• The only other region in the Southern Hemisphere with a production season similar to Tasmania’s is the south island of New Zealand. Tasmanian fruit competes effectively with New Zealand fruit on both domestic and overseas markets.
• Tasmanian cherries are already being exported to some Asian and European markets. Japan has expressed interest in Tasmanian cherries and DPIWE, together with the local industry body, is developing the necessary disinfestation protocol to export cherries into Japan. Quarantine barriers against Tasmanian cherries going into USA have been lifted, but will require continued monitoring for light brown apple moth.
• A recent cherry orchard investment analysis identified an Internal Rate of Return for invested capital of 19% for a new four hectare development. Considerably higher rates of return may be achieved for orchard expansion. This opportunity underlies recent investment in capital-intensive orchard developments.
• Apricots have undergone considerable development in the past five years. Significant market opportunities exist, both domestic and overseas, for Tasmanian apricots, especially in Europe. Trial shipments of apricots have been well viewed in the UK to date.

DPIWE and industry are working on programs to address the problem of weather vulnerability (variety evaluation, pre-harvest chemical treatments, orchard management systems, rain-protective covers).

• DPIWE’s advisory and information program is continuing to encourage the apple industry to diversify into stone fruit production (especially cherries).

CHALLENGES

• As well as food safety and quality assurance guarantees, markets, especially European markets, are increasingly demanding assurances that food has been produced in a manner not detrimental to the environment, while also addressing issues related to worker health and safety and pollution control. In the future growers will need to adopt some form of ‘ecolabel’ to substantiate their claims of ‘safe, quality and green’. Government will assist in keeping industry informed of market trends and provide assistance to producers seeking ecolabel accreditation.
• Availability of seasonal labour for harvesting is becoming an issue and will become more urgent as production increases across a number of industry sectors (stone fruits, wine grapes, vegetables, olives, apples etc). Providing adequate facilities for seasonal labour will also be an issue.
• Major weaknesses in the Tasmanian industry to be addressed are: lack of centralised marketing; relative size (volumes of supply and continuity of supply for export markets); vulnerability to weather (large potential fruit losses in some seasons); lack of a major processing industry to absorb lower grades of fruit; and availability of airfreight space during the Christmas–New Year holiday period.