Costa Group takes steps to limit its losses from drought

Costa Group will shift to early pruning of some of its raspberry crops in a battle against the drought.

Costas says raspberry plantings will be dependent on receiving summer rains

Poor weather conditions led by drought are forcing Costa Group, the nation’s leading grower, packer and marketer of fresh fruit and vegetables, to shift to early pruning of some of its raspberry crops to protect the harvest and put a clamp on water usage.

While Costa has stuck to its forecasts for 2020, the company did warn shareholders in a weather update on Friday that it would suffer shrinking earnings at one of its fruit farms, although its berry farms in Tasmania and far north Queensland had not been affected by drought.

In a statement to the ASX, the company said the continuing ­severe dry and hot conditions in northern NSW had required careful crop management at Costa’s Corindi berry farm for several months.

“With no significant rainfall during spring and early summer, prudent use of available water from our network of dams, ­including our largest dam, which in recent years had its capacity ­expanded to circa 900ML, until now allowed the company to maintain near normal production and harvest patterns,’’ Costa said.

Due to the rainfall forecast at Corindi being lower than the average for the remainder of the year, the company will remove a significant part of the current ­annual raspberry crop and early prune some of the lower-value blueberry varieties to conserve the priority crop.

“This timing coincides with the transition period for raspberry production to Costa’s ­extensive Tasmanian plantings where volume is building strongly with an expectation for a favourable summer and autumn crop,” the company said.

“Similarly, blueberry production at Corindi is nearing its seasonal conclusion, with our Tumbarumba farms now in ­harvest to be followed shortly by Tasmania.”

The company said raspberry plantings, scheduled late in the first quarter, were planned to resume but would be dependent on receiving summer rains. The Corindi farm would experience some loss of earnings next year.

Costa shares have collapsed this year in the wake of a string of profit warnings and a large capital raising. The shares closed on Friday up 7c at $2.44.