Pack Payments Discussion
Pack Payments, also referred to as Pack Differential, compensates for the differential cost of packing services carried out for each variety being packed, cooled, delivered to wharf and stowed FOB. The intention of a pack differential payment is to:
- Fairly compensate for packing a variety into a pack type other than a base pack e.g. layered packing (IT) vs bulk packing (ML/MB)
- Accurately reflect the differential costs between each pack type such that the markets are fully aware of the cost implications and can subsequently drive optimal allocation decisions to promote Grower OGRs.
In our 21 December 2018 weekly update, NZKGI advised that Zespri had issued an Industry Communication via Canopy (here) of changes to the 2019 pack differential rates to address an imbalance of packing speed and cost differences associated with layered packing versus bulk packing. NZKGI reviewed the packing speed/cost model utilised in establishing the rates and are in support of its methodology and use. Given the rebalance in the pack differential charges paid by the pool, Growers should be clear on how this benefits and flows through to Growers in the base packing charges. All Growers are encouraged to speak with their post-harvest facilities to understand the impact.
This is also a timely reminder that Growers might find the NZKGI Grower Payments booklet, available on our website (here) to assist with understanding their facility Forecast Statement and how it works with the Zespri Payment Summary and Kiwiflier.