Psa expected to hit growers hard in the pocket

The financial effects of kiwifruit vine-killing disease Psa are expected to hit growers hard by the end of the financial year, with profits at typical Bay of Plenty orchards predicted to fall by one third.

The Ministry for Primary Industries (MPI) today released its annual analysis of kiwifruit production and profitability, which, for the first time, showed Psa having a significant impact.

Psa was first identified in November 2010 but, for most Bay of Plenty orchards, did not affect the yield of last year's
crop.

But the profitability of the typical Bay of Plenty orchard was predicted to fall by one third to about $44,000 (pre-tax) for the year to March 2013.

The report, part of the MPI's annual farm monitoring series, is based on a model of a Bay of Plenty orchard and an overview of the financial performance of typical orchards, using information gathered from a sample of growers and industry stakeholders.

``With Psa impacts on individual Bay of Plenty orchards ranging from none to severe, MPI has modelled three additional scenarios for 2012/13,'' MPI said in a statement.

``Under a scenario of no Gold kiwifruit production, it is predicted that there would be a cash operating deficit, a pre-tax loss and a negative cash position, and an injection of additional cash would be required to cover operating costs and living expenses.''

MPI also extended the kiwifruit model budget out to 2015/16, and the analysis shows the model would be in deficit for the next two years.