The Price Paid

Before the price paid for any produce is known during the buying process, sellers and buyers work through a delicate process aimed at achieving the right price. Just what this right price is and how it is achieved fills a book and cannot possibly be condensed onto a short web page. But there is no harm in trying I guess...

What buyers ultimately pay for produce is dependent upon volumes available, the condition the produce is in, how critical it is to have that produce in stock and what its anticipated shelf life is likely to be. And as there are no 'recommended retail prices' for produce as there are for whole ranges of manufactured food products, buyers have to rely on market intelligence to help them answer the questions which are involved in settling the price that needs to be paid.

Anyone buying produce at markets can establish the condition the produce is in with relative ease. When auctions were still the dominant place where produce was bought and sold, the question of volume availability could also be answered with some degree of certainty. Today, there is no longer a central place for produce to pass through on its journey between grower and retailer. Understanding total supply available on any given day is therefore anyone's guess.

In order to get reasonably close to what the price should be on any given day, buyers need to not only understand the demand/supply situation of the day but also have a fair appreciation of the broader picture. Which large growers are in full supply, which growers are just coming on stream, whose supply is drying up? What is known about these growers, their work ethic and the produce quality they produce?

As most produce changes hands these days without every box, crate and carton being physically inspected by the Distribution Centre based buyer, sample based buying, buying on the basis of photos supplied via email or buying after a third party professional product inspection are becoming the norm.

The price paid takes on an even more complex meaning for importers. All the above comments relate to imported produce as well, once it reaches its intended foreign markets. 

But what is the right price that should be paid for a container of Chilean nectarines? How many importers are bringing in the fruit? How has the product held up? What is the shipping schedule? Whose boat arrives first? 

More questions than answers, I am afraid...but these serve to illustrate my point. The fruit trade might present as being deceptively simple and unsophisticated....but this impression could not be further from the truth.

Fruit Trade Methodology

Fruit Trade Future

Fruit Trade HQ