The kiwifruit industry could lose ten million trays of Gold kiwifruit to the vine canker PSA this year.

'What we've seen is causing us real concern,” says Zespri CEO Lain Jager.

See video below of Zespri CEO Lain Jager talking about grower meetings.

Speaking following today's Zespri annual general meeting Lain says Psa has continued to spread through Te Puke kiwifruit orchards during the winter.

He has concerns about the rate of spread Psa is showing, and its virulence – particularly on Gold kiwifruit.

'We do expect to lose crop for next year, the extent is not clear at present,” says Lain.

'We could lose 10 million trays from the Gold crop.”

The Gold crop this year was 30 million trays, and Psa could reduce that to 20-24 million trays.

The Green crop which was 82 million trays this year, could reduce to about 70 million – but that is more from climate.

Last year's growing conditions were better, but this year there has been a warmer winter.

'It's still early days,” says Lain.

'The impact of Psa on Hort 16A is a real concern to the industry – we will know a lot more over the next month as the sap starts to flow.”

Meanwhile Zespri is in the middle of selling the 2010/11 crop and is having to drop estimates on both green and gold because of a combination of the high dollar, and market factors.

There are also concerns looking forward over hedge cover – all reasons why Lain says growers are keen to start the grower meetings with Zespri over the next couple of weeks.

In his report Laine says the August forecast shows per trays returns will be down on the back of the larger crop, but this will be significantly offset at per hectare level by higher orchard yields this year.

'With the later start and the larger crop, our global weekly run rates are up for Gold on last year and in line with last year for Green. This will leave us with a slightly later finish in most markets with the final result highly dependent on storage performance particularly for Green,” says Lain.

The strength of the New Zealand dollar is an issue which has been in the headlines recently.

The integrated industry model supports an effective foreign exchange policy, which this year versus an unhedged position is worth approximately 96 cents per tray for Green and $1.36 per tray for Gold.

Hedging only smoothes the peaks and troughs of the dollar and the strength of the kiwi versus our major trading partners may eventually put the industry, particularly the Green business, under severe pressure, says Laine.

"To give you a sense of what we can expect at current exchange rate levels at the current crop volume, the downside for 2012 will be approximately 30 cents per tray with a further 22 cents per tray downside in 2013. This is despite still strong hedging on the Yen.

"Like all other NZ exporters we hope for some currency relief in coming seasons, and we do expect the potential downside for next year will be partially offset by a positive mix impact at a per tray level by a potentially smaller crop due to Psa and seasonal factors.

"Except for Psa, foreign exchange is our most troubling headwind. To mitigate its impact addressing supply chain costs will be a vital component of supporting grower viability.

"Zespri and Post Harvest Operators are currently discussing some aspects of our supply chain arrangements with the objective to reduce fruitloss and condition check and repack costs ahead of next season.

"When we met this time last year we spoke about the industry being on the cusp of a hugely exciting growth phase.

"Today, we meet in opposite circumstances. The advent of Psa presents the industry with its greatest challenge."