Essential pricing lessons
THE REAL DEAL
From February to May this year more than 140 growers, across 10 locations, completed the CANEGROWERS-TAFE Pricing Essentials course. With the sugar price now moving in a positive direction, these growers are putting what they've learned into practice. It's a wise move, with sugar marketers reporting that growers who actively participate in pricing their sugar earning, on average, $30 more per tonne over those that did not. In 2015 the Queensland Parliament passed legislation guaranteeing choice for growers and triggering competition between sugar marketing services. "Since 2015, the pool managers have become more competitive and there are a lot more options now so I have to monitor them more closely,” CANEGROWERS Isis Chairman Mark Mammino says. “What might be good this year might not be next year, so it’s forced me to read and understand the market a lot more. “While it’s added work, the rewards are worth it. If I can pick $20 - $30 a tonne in sugar price with that effort, it pays for itself and anything above that is an extra bonus.” CANEGROWERS recognised that for all growers to make the most of this new environment, many needed to develop skills around understanding costs of production and forward pricing, price risk management, and financial planning tailored to their particular circumstances.
“While it’s added work, the rewards are worth it. If I can pick $20 - $30 a tonne in sugar price with that effort, it pays for itself and anything above that is an extra bonus.”
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Without a background in business management or finance, this could seem daunting, so CANEGROWERS created the Pricing Essentials for Cane Growers workshop. CANEGROWERS Herbert River Chairman, Michael Pisano, attended the workshop in Ingham and said it hit the mark. “Not only did it give growers the knowledge and the skills to do certain things, it gave them the confidence to know that ‘I can do this’,” he said. Mark Mammino was among the dozen people who attended in his region and he agrees. “It helped me validate my assumptions around my cost of production, and I wasn’t too far off the mark, while others found theirs wasn’t as high as they were thinking it was and they left feeling more confident about forward pricing.”
