Their 200-cow herd has been sold and they are waiting for water consent approvals for the deal to be finalised.
The couple plan to buy another dairy farm, leaving the day-to-day operation to a sharemilker.
Tui said three other dairy farms at Aupouri Peninsula near Kaitaia had been sold in the last two years for development into avocado orchards. One former dairy farm milking 400 cows now employed 40 seasonal workers in its orchard, with its trees still years from full production.
“It’s huge. The whole landscape has changed in two years.”
Known for its early-season production of vegetables, the region’s climate and soil suited avocados, with access to water the key final ingredient.
“This is the new capital of avocados,” Tui said.
NZ Avocado chief executive Jen Scoular said the industry had 3800 productive hectares, with another 1000ha planted in the last three years.
“We are comfortable that there is global demand for the increased plantings and are happy to see continued investment in avocados.”
New Zealand represented only 1 per cent of world production and while global demand was growing 10 per cent a year, supply was only increasing by 3 per cent.
While Bay of Plenty represented 65 per cent of production, new plantings were in Northland, centred around Houhora in the Far North and Tapora in Kaipara Harbour.
Avocado plantings did not have to involve a total farm conversion “If you have 4ha of avocados on your dairy farm, it’s another source of income and environmental diversification and can assist succession planning by providing an option for the next generation,” Scoular said.
Investors include businessman and mandarin grower Tony Gibbs who has developed one of New Zealand’s largest avocado orchards with the planting of 45,000 trees completed at Tapora last year and former Fresh Food Exports owner John Greensmith who has a 50ha orchard. Trees start producing after about three years, but do not reach full production until seven years.
Kiwifruit plantings also continue to grow, with Zespri expected to supply more gold kiwifruit than green this harvest.
Zespri will continue to release 700ha of SunGold and 50ha of SunGold organic licences each year until 2022, subject to annual review, a spokesman said. Under this planting regime, 9600ha of SunGold and organic SunGold will be planted by 2023.
MyFarm Investments head of research and former bank agri-economist Con Williams said that while dairying had dominated land use change since the early 1990s, this changed in 2015. Since then milk production had been stable with a slight decline in dairy farm numbers as prospects for horticulture and forestry burned more brightly.
“We are looking at four dairy farms to buy to go into kiwifruit, hops and viticulture and we are not the only ones doing this,” Williams told
the Grow 2019: Boma NZ Agri Summit in Christchurch.
Horticultural land had been reasonably stable, but could expand by 5 per cent. Forestry could also expand by 0.5 million hectares if the Government’s goal to plant one billion trees was achieved, expanding the plantation area by nearly a third.
While anyone in the world can grow Hayward green kiwifruit, New Zealand growers received a 40 to 100 per cent price premium in world markets. Along with marketing, this was because of an emphasis on quality, with 40 per cent of returns green growers received aligned to fruit quality.
“This is required because of the cost of producing kiwifruit in New Zealand is higher because of labour and freight costs.”
As Sungold kiwifruit can only be grown under plant variety right licence, these premiums were even higher, Williams said.
Exclusive apple varieties such as Jazz, Dazzle and Envy also attracted price premiums.
“It wasn’t that long ago that there was no price differential for apples. Now there is a 35 to 40 per cent price premium for exclusive licenced varieties.
New Zealand was a good place to produce apples and while production averaged 60 tonnes a canopy hectare, new varieties were producing 100t per ha with good packout rates.
“Production, packout, quality and price are coming together.
“That is what is driving a lot of apple investment in Hawkes Bay and to a lesser extent Nelson,” Williams said.
MyFarm, which provided syndicate opportunities for individuals to invest in the primary sector had moved away from its initial emphasis on dairying. Last year, MyFarm raised $61m from 264 investors for investments in hops, avocados, kiwifruit, vineyards and a manuka plantation.