If It Cost More, Would It Get More Respect?

APPLE BUYING IS SERIOUS BUSINESS

Growing is a mug’s game – or so one of my team members often says.  Growers are at the mercy of so many things, 75% of which are completely beyond their control!  There’s the weather, the market, transport and fuel costs, compliance, staff, pests…and that’s not the complete list. So really, why would you be a grower?

Thing is, we – human beings – need food.  And food comes from the land, from growers.  So to eat, we have to have someone to grow it.

Sure, in an ideal world we can keep a chicken or two, a goat, an apple tree and a vege garden in our own back yard.  Problem is, very few countries, New Zealand included, have the luxury of sufficient arable land to give every family the quarter acre that such a utopia requires – never mind having the necessary favourable climate, let alone the skill set…

But – and this is definitely true in New Zealand – there are still people around who remember when that was possible.  And so they resist paying for fresh produce.  And supermarkets, in an effort to keep customers, price fresh produce at a level to entice people through their doors.

Net result?  Not much return to growers.  That same team member tells of a grower celebrating a season when the grower return was actually really good.  Great! However, that grower was also heard to say “it was the perfect season!  I waited 20 years for it, and it’ll probably be 20 years before it happens again…”

What investor do you know that is willing to wait 20 years for a dividend?

The point I am trying to make here is that fresh produce is seen as easy to grow and plentiful, and therefore perceived by consumers as being by right a low priced item.  Low priced, easy and plentiful also means there is a lot of consumer resistance to anyone trying to nudge the prices up – even if it means that the return to growers might then actually cover their costs and allow them to stay in business.

What if it is not plentiful?  Take the current price of tomatoes, for example: $13-16/kg.  Outrageous say the customers.  Perfectly understandable, says the NZ Herald  given that tomatoes at this time of year are imported from Australia, and from an area that suffered devastating floods in January.  Lots of outraged comments on the various websites running the story with many of them saying “buy seasonal!” and “Grow your own, I do!”  That’s all very well, but it does not t bring in the return to a grower trying to recover from the flood, never mind the point I made earlier in this post about the rapidly decreasing availability of land for the urban dweller to “have a vege patch and freeze the surplus”.

And if a grower isn’t getting much return normally, how are they to afford to put in place safeguards so that they can survive the adverse conditions and live to grow another day?

Food security is a current buzz word, along with sustainability.  To secure your food supply, surely you need to first secure your food supplier…and boy, we do still have a way to go in this area!

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