With a sliding dollar and recent free trade agreements with our three biggest Asian trading partners, cherry growers in Australia are smiling.
In the past seven months, Australian cherry exporters have experienced exceptional growth.
Australia, Chile and New Zealand are the three major cherry exporters in the Southern Hemisphere.
The growth of this industry is evident in the figures, with annual production in 2001 sitting at 7,000 tonnes. By 2014 this figure had multiplied to 18,000 tonnes in Australia and 140,000 tonnes in Chile. In fact, Chile is on track to double production within the next five years. These are figures that are likely to break all previous records.
An insatiable appetite for cherries in China has exemplified growth. The Chinese see cherries as a luxury, an affordable one, but a luxury nonetheless. In a culture that is very much about impression, cherries are viewed as gifts of beauty.
The fact is the Chinese and Japanese have been known to pay $1 per cherry for premium quality fruit.
And that is where Australia stands above other exporters.
“We are carving a reputation as a premium quality supplier of fresh cherries,” says Stuart Payne, managing director of GP Graders, a supplier of fresh produce Grading Machinery and the world's leading manufacturer of cherry sorting and packing machinery.
Tasmanian Exporter of the Year
GP Graders supplies equipment to some of the countries biggest exporters including Reid Fruits and Wandin Valley Farms. Their technology utilises camera systems to analyse the size, shape, colour and, importantly, the quality of cherries. In effect packers can present perfectly size graded cherries (in an industry that can achieve a $5 difference per kilogram across the 2mm separations in commercial sizing) and perfectly colour separated (so shades of red cherries are like-with-like).
Reid Fruits won the Agribusiness Export Award and the overall 2014 Tasmanian Exporter of the Year Award.
“The Tasmanian cherry industry in general usually produces larger cherries than other growing regions, says Tim Reid, Managing Director of Reid Fruits. “We have a longer, cooler climate, which means we can leave them on the trees for elongated periods of time during growing season to reach full potential in size and flavour.”
GP Graders also supply Reid Fruits with a 12 lane AirJet grader which sorts the best of the crop and has enabled them to penetrate 20 different export markets.
A shortage in processing capacity in Chile gives Australia the edge in the international export department, although GP Graders have started taking orders for machinery within Chilean regions for 2015. GP Graders is likely to install around 10 new complete lines in Chile ranging from $2m to $4m each.
‘Not easy selling fruit overseas’
It will certainly make Chile more competitive in the premium supply sector. Australia, however, still has that edge but like any industry there are difficulties.
“It’s not easy selling fruit into the overseas market,” Mr Reid says.
“Internationally we are competing against lower cost operations. They grow in huge volumes and flood the market. To compete against international companies who are flooding the market, we have to have premium product and are trying to build volume around that. We also need to be diverse in our marketing efforts and service the top end of the market.”
Reid Fruits has worked tirelessly over the last 25 years to be in such a strong position. Reid has done a lot of work to assist the Tasmanian apple and cherry industries.
“I have championed the cause on behalf of the wider industry to work with the Federal and Tasmanian governments to open the doors to barriers to trade and we have developed the largest single block of cherries in Tasmania. We have put a lot of effort in growing high quality fruit and have a great team behind us.”
Fruit fly problem
In some respects, the barriers to trade that Reid speaks of have held mainland Australia back.
Tim Jones, Director at Wandin Valley Farms which has orchards in Victoria and Tasmania says: “The one thing that goes against mainland Australia is our inability to access specific markets.
“In the last five years, mainland Australia has lost Thailand, Taiwan, and Vietnam and cannot access China or Korea due to a perceived fruit fly problem. However the cherry industry is working pretty hard with the Federal government, and the industry State bodies are working closely with State governments and from our perspective we work closely with the Victorian government on Trade missions.”
Mr Jones says the federal government and the Department of Agriculture should investigate ways to negotiate opening up markets for mainland Australia, which allows us to access these markets by air.
“Tasmania has free market access to China, Taiwan, Korea, Japan and Thailand, but the mainland has none, he says. “What we need are nationally agreed pest free areas for production, similar in some ways to the pest free area status of Tasmania.
“However, for example, when I bring our fruit over from our Tasmanian orchard to pack at our packing facility in the Yarra Valley we lose our pest free status. We have to get this area registered overseas as an approved ‘pest free zone’.”
Wandin Valley Farms, along with two other Victorian growers, has formed a relationship with the Victorian government to counter this and are working very strongly to improve international market access.
They recently formed an association with a Province in China to offer advice to local farmers who are keen to commence growing cherries and it is hoped this will in some mall way be looked at as a step forward to gaining entry.
However for both Reid and Jones, who have recently both won export awards, their businesses exemplify the strength of the Australian exporting industry. And both are looking forward to future opportunities.
“China will be the biggest market this year,” Reid says. “Equally as big is Hong Kong and other major markets include South Korea, which has been bolstered by the free trade agreement that reduced tariffs from 24% to 0%. Taiwan is also a main focus.”
Reid Fruits expects to produce over 1000 tonnes in 2015 and the orchard is not in full production.
“We will produce over 1000 tonnes and of the first grade fruit 85% to 90% will be exported,” Reid says.
Meanwhile Wandin Valley Farms will look to further expand their orchards.
“We’ve recently purchased a property in the north of Victoria and our focus is to slightly broaden our harvest window and grow exportable cherries from late October through to the end of January. Our main focus is a 12-week window of quality export product for local and overseas markets. Lets hope that overseas markets either become or remain accessible to mainland growers.
Stuart Payne, whose family business GP Graders was named as Australian Exporter of the Year in 2014 says the Australian cherry industry is a story of quiet achievers.
“Whilst there are state based grower associations, each packer grows, packs and markets under their own brand in Australia and to foreign markets, Mr Payne says. “And they have achieved great success leveraging off Australia’s reputation as a clean, fresh and premium source of fresh produce and food in general. This is becoming the esteemed reputation of ‘Brand Australia’.”