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n95950
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  #2701451 3-May-2021 21:16
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interesting...


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Fred99
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  #2701564 4-May-2021 10:07
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Geektastic: 

I was in Hawkes Bay at the weekend. The trees are groaning with unpicked apples.

 

If they doubled the current payment per bin to pick apples, it would only add about 6 cents per kg to the cost of apples.

 

Perhaps they're not offering high enough wages to attract the workers they need.

 

 


Batman
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  #2701574 4-May-2021 10:27
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Rikkitic:

 

If there's no value for the consumer it won't happen either.

 

 

 

 

i don't think that's correct in the sense - of what you think value is vs what consumers think value is.

 

for me spending $3000 on a phone every year is not value - so I, and presumably you don't buy one. but for apple fans, they buy it. 

 

i don't pay $5 a litre for lewis rd creamery chocolate milk because that's not value. but people buy them.

 

there are adidas shoes on sale at 70% off at platypus for the last 2 months - i kid you not. i've bought at least 2 pairs for each of my family but they're still there, nobody wants to buy them. 

 

sometimes value is what consumers think are after, but the reality is i think it's all mostly marketing.





Involuntary autocorrect in operation on mobile device. Apologies in advance.




Rikkitic

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  #2701598 4-May-2021 11:09
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I'm not sure I get the point you are making. The value of anything to anybody is always what the person paying for it perceives it to be. I think we agree on that.

 

 





Plesse igmore amd axxept applogies in adbance fir anu typos

 


 


frankv
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  #2701692 4-May-2021 13:08
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Fred99: 

If they doubled the current payment per bin to pick apples, it would only add about 6 cents per kg to the cost of apples.

 

 

I'm not sure how you get to that figure. Is that how much apple pickers get paid?

 

From https://www.mpi.govt.nz/dmsdocument/26506-Farm-Monitoring-Report-2017-Pipfruit-Monitoring-Programme, the "model" Hawkes Bay 40ha orchard made about $2M (in 2017) by selling 125,265 trays of 18kg, and making 35% profit. Do the arithmetic, and the orchard was selling apples at about $1/kg, and their cost was about 65c/kg.

 

From https://www.tupu.nz/en/fact-sheets/apples-and-pears, labour costs (which I guess also includes work other than picking e.g. pruning) are about $20K per hectare, or $400K for the 40ha MPI model orchard, or about 20c/kg of fruit produced. I don't know what proportion of the labour is picking, but judging by how much extra labour is needed for harvest, it must be a substantial majority, so I'm guessing 75%. So if you screw your full-time workers and not increase their wages, but double the pickers' wages, labour costs would increase by maybe 15c/kg, not 6c/kg. 

 

But the orchard will add on a percentage of all their costs for their profit, so they'll sell their apples not for $1.15/kg, but for $1.23/kg. And the profit-takers between the orchard and the supermarket will maintain their profit margins, so the end price will be a lot more than 23c higher.

 

15c/kg is roughly 25% of the orchard's cost. When it feeds all the way up to the supermarket who now sells apples at $6/kg, supermarket prices would also increase by 25% (i.e. about 1.50c/kg). 

 

 


Bung
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  #2701747 4-May-2021 15:33
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I don't think supermarkets can increase prices by much. Over the last 4 or 5 years I think the price of apples is set as high as the market will pay unless the apples are going off. Then you might see some reduction.

Fred99
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  #2701918 4-May-2021 20:10
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frankv:

 

Fred99: 

If they doubled the current payment per bin to pick apples, it would only add about 6 cents per kg to the cost of apples.

 

 

I'm not sure how you get to that figure. Is that how much apple pickers get paid?

 

 

It's cost of picking - not retail price.

 

Pickers get paid per bin, which is about 350-450kg at a typical bin rate of about $25-$30.

 

It seems obvious that picking about 2 1/2 tonnes of apples a day to make minimum wage isn't an attractive option to many folks.  Not unique to NZ, here's a group of Jamaican migrant workers I stayed with on an apple orchard in New Hampshire, on the work bus on the way back from the supermarket, buying rice and peas (beans) for a cook up.

 




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  #2701925 4-May-2021 20:27
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Without spending ages writing an article about apple pricing (I spent 30 years in the supermarket industry from the day I could walk and spent many years as a produce buyer) it's not as simple as you describe.

 

The price a grower gets paid for their applies isn't the wholesale cost for the product in it's retail ready state. Once picked the products are then stored in CA + smartfresh storage which is not cheap, and fruit then needs to be packed and then distributed around the country. There is then wastage from this from blemished fruit which depending on the variety can go for juicing or other uses, and importantly not all apples are the same size meaning prices will also differ.

 

Like everything there are good quality apple growers and plenty of pretty average apples growers out there. Companies like Yummy do an amazing job of apples and that comes at a price.

 

 

 

 


Fred99
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  #2701926 4-May-2021 20:28
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Bung: I think the price of apples is set as high as the market will pay unless the apples are going off.

 

Every single item in the supermarket is set at the highest price the market will bear, even if the apples are going off.

 

Capitalism 101 - "leaving money on the table" is a crime ultimately punishable by business failure. 
(Note I'm not saying that's a bad thing, just that it is what it is)


Fred99
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  #2701928 4-May-2021 20:33
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sbiddle:

 

Without spending ages writing an article about apple pricing (I spent 30 years in the supermarket industry from the day I could walk and spent many years as a produce buyer) it's not as simple as you describe.

 

 

It most certainly is if you're trying to make a living picking apples.  You get paid per bin, the more bins you pick the more you get paid.  Pick less than you'd get on bin rate than equals minimum wage, you lose your job.


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  #2701930 4-May-2021 20:38
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Fred99:

 

sbiddle:

 

Without spending ages writing an article about apple pricing (I spent 30 years in the supermarket industry from the day I could walk and spent many years as a produce buyer) it's not as simple as you describe.

 

 

It most certainly is if you're trying to make a living picking apples.  You get paid per bin, the more bins you pick the more you get paid.  Pick less than you'd get on bin rate than equals minimum wage, you lose your job.

 

 

I'm meaning the wholesale (and retail price) compared to the price per bin for pickers.

 

 


Fred99
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  #2701938 4-May-2021 21:08
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sbiddle:

 

I'm meaning the wholesale (and retail price) compared to the price per bin for pickers.

 

 

Yes sure, I was being specific about what seems to be a bottleneck in labour supply for picking, the impact of increasing wages for that alone wouldn't impact retail prices much.

 

I do recall an argument when GST was introduced and increased, that the impact on cost would be absorbed on commodities like food, because "the market" set prices - it wasn't a "cost plus" model like some monopoly that decides what return it needs - and sets prices to meet that.


frankv
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  #2702053 5-May-2021 08:24
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Fred99:

 

Yes sure, I was being specific about what seems to be a bottleneck in labour supply for picking, the impact of increasing wages for that alone wouldn't impact retail prices much.

 

 

Even if we take your rate of 6c/kg for picking, that's still about 10% of the cost of the apples. That'll end up as a 10% increase on the retail price.

 

I do agree that the lack of supply of pickers would disappear if wages were increased. It's funny how free market economics is touted as a good thing when it comes to selling stuff, but not when it comes to hiring people.

 

 


1101
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  #2702143 5-May-2021 11:32
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Fred99:

 

Perhaps they're not offering high enough wages to attract the workers they need.

 

 

I'd bet its because the majority of NZer's simply wont uproot & move down there , just for a limited time , and just for wages that wont make it all worthwhile.
So , a hard job that doesnt pay well for inexperienced, poor living conditions, away from friends and family , and still have to pay for accommodation .So why bother .

 

Then when the short picking season ends, the new pickers would have to re-establish the lives the had before picking: find a new place to live etc
Its a lifestyle most just dont want .


frankv
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  #2702155 5-May-2021 11:55
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1101:

 

I'd bet its because the majority of NZer's simply wont uproot & move down there , just for a limited time , and just for wages that wont make it all worthwhile.
So , a hard job that doesnt pay well for inexperienced, poor living conditions, away from friends and family , and still have to pay for accommodation .So why bother .

 

Then when the short picking season ends, the new pickers would have to re-establish the lives the had before picking: find a new place to live etc
Its a lifestyle most just dont want .

 

 

I suspect what's now exposed is the level of black work going on in orchards in previous years. Now there's no poor backpacking tourists around to take this kind of work, so orchards are struggling to find legal workers.

 

Perhaps the University/school holidays could be aligned with the fruit picking season? I suspect that students might more readily accept those conditions, since they're pretty much living with them already. I recall that when I was at high school, a couple of my 6th form (aka year 12?) classmates went to Nelson for fruit-picking. I don't think they made much money, but apparently enjoyed the experience. And smoked a lot of dope.

 

I assume that the picking season would vary a bit from one end of the country, so maybe there's an opportunity for people to work itinerantly, following the season from one region/crop to the next, and thereby get experienced and better money over a longer period?

 

 


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