Still the best option

This week I want to discuss orderly marketing on the local fresh produce commission markets. This can be a harsh school for the unwary, but it can also be beneficial for those who understand how local markets work.

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In my recent column on the ‘10 Commandments of Fruit Marketing’, commandment number eight said: “Strive mightily for a stable market, for therein the merchant buys tomorrow’s needs freely and in confidence. But when the price-cutters enter, the merchant withholds buying, lest his competitor buys cheaper or tomorrow’s fruit be lower. And the unsold fruit piles up.”

Farmers don’t know what others are sending to the market. The best they can hope for is an honest assessment of the situation from their market agents around the country. They can then make an educated guess as to what volumes to send to which markets.
The worst thing they can do is pump as much as possible into a market at the expense of the others.

If it sounds as if prices are on the rise at one market, by all means give it more, but do not do so at the expense of the other markets. Continuity of supply is fundamental to orderly marketing, as it builds brand awareness and loyalty with buyers. The rule of continuity ensures good average prices at the end of any given period. And, as any professional farmer will tell you, it’s those averages that count – not just high prices!

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The export avocado arrangement works because it’s voluntary and based on a mutual need for a profitable market. This beats the alternatives – such as, heaven forbid, government interference in the form of ‘controlled marketing’. While the avocado sector never had controlled marketing in this country, it has taken some key lessons from that era on board to ensure it doesn’t repeat the same mistakes made by the old marketing boards.

Anybody with marketing savvy understands that supplying our markets can be fraught with hazards, but when you understand this and conduct your marketing accordingly, it still works out the best. The temptation to bring in any form of statutory marketing scheme should be avoided at all costs.

I don’t expect successful farmers to reveal their market prices to anybody, but you can bet your last pocket of potatoes that their averages will reveal an income unmatched by any other marketing option.

Contact Mike Cordes at [email protected]. Please state ‘Market floor’ in the subject line of your email.