How not to gamble with vegetables

Vegetables are squarely in the free market system and as such, the prices are influenced by supply and demand. So unless you have a contract, you’ll be planting without knowing what price you’re going to get for your produce.
Issue date : 27 February 2009

Read more

- Advertisement -

Vegetables are squarely in the free market system and as such, the prices are influenced by supply and demand. So unless you have a contract, you’ll be planting without knowing what price you’re going to get for your produce. It’s like the stock exchange – buying shares with the expectation of a profit later on. If we put all our money in one company’s shares, we can make a huge profit if the shares are good or we can lose money the other way around. This is why investors go for a basket of shares to spread the risk and with the correct selection, they know they’ll make money in the long term.

The same applies to vegetables – we can either spread the risk by growing different crops or spread the risk by staying with the same one over a long period. With the latter, the frequency of marketing the same crop can be equivalent to having a basket of shares. But the farmer will have to have the resources to get through a period of below-cost prices before the market swings in his favour. This choice will favour those who are well-established and confident of high yield and good quality.

A few months ago, I heard a large seedling grower say to a farmer that the cabbage price was going to be at least R50 a bag in January, and he could virtually guarantee this, based on the number of plants he and other nurseries had sold during the period, which would mature in January and after. This low was brought about by high input costs and low prices at the time. In January, the price exceeded R50 a bag and sparked a demand for cabbage seedlings which growers were unable to supply. This is like buying shares when their value has peaked and is ready to drop. What’s certain is that there will be a low market price some months after the nurseries have supplied the increased demand for seedlings.

- Advertisement -

The safe way to grow vegetables is to soberly decide which crops suit you best, then grow only as much as you can look after properly to get good yield and quality and stick to them. For those who like to gamble, the formula is to plant a little more of a crop with a low price on the market at the time and a fewer of those getting a high price. – Bill Kerr Contact Bill Kerr on (016) 366 0616 or e-mail [email protected]     |fw