Forward pricing has helped growers to improve their pricing outcomes.
Forward pricing has allowed cane growers to develop pricing strategies for their business to help improve pricing outcomes.
In agriculture it is difficult to be a price setter but utilising Call and Target Pricing gives growers the ability to say YES I will price sugar at a certain level, or NO I will not. It is about growers weighing up their best pricing strategy and having greater control over their business.
Call and Target Pricing gives growers a pricing window of more than three-and-a-half years. Time is a valuable tool to help growers achieve their desired pricing outcome.
Looking specifically at the 2017 to 2019 seasons, sugar prices above $450 per GEI tonne were available for about 40 per cent of the pricing windows available to growers.
During the 2017 season, pricing at or above $450 per tonne was achievable for 51 per cent of the pricing window. During the 2018 season, this was 39 per cent, and for the 2019 season, 32 per cent of the pricing window.
The chart (right) highlights the last three seasons since the introduction of Grower Choice. It shows what price levels have been available, as well as what prices were achieved by growers who priced through Wilmar.
Growers marketing with Wilmar during the 2017 to 2019 seasons have been able to lock in an average Call or Target price of $495 per tonne actual for 2017, $436 per tonne actual for 2018 and $439 per tonne actual for 2019, for up to 70 per cent of their estimated production.
Plane Creek grower Stewart Borg said the ability to Target Price had given him greater control over his returns.
“Without Target Pricing we lose the ability to forecast and forward budget for our business,” he said.
“For us, the difference between having control of our business through Target Pricing is the difference between being in the red or the black.
“Target Pricing gives us full control of our business performance.”
Wilmar’s Grower Marketing consultants are happy to sit down with growers to explain the various pricing options available.
Read Wilmar Growers’ Forward Pricing Performance (2011-2019 seasons) analysis here.
