Price Determination in the Australian Food Industry A Report
Price Determination in the Australian Food Industry A Report
Price Determination in the Australian Food Industry A Report
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Does <strong>the</strong> fresh cha<strong>in</strong> add value?<br />
Examples of <strong>the</strong> role of <strong>in</strong>termediaries <strong>in</strong> <strong>the</strong> fresh product cha<strong>in</strong> <strong>in</strong> view of <strong>the</strong> differentials<br />
between retail prices and farmgate returns are as follows:<br />
Stage Value added Costs added<br />
Grower • Production <strong>in</strong> accordance with Production costs<br />
grow<strong>in</strong>g specifications<br />
• Harvest<strong>in</strong>g to optimise fruit quality<br />
Pack<strong>in</strong>g house • Grad<strong>in</strong>g for consistency Pack<strong>in</strong>g and storage fee<br />
• Pack<strong>in</strong>g <strong>in</strong>to market consignments Freight cost<br />
• Storage <strong>in</strong> controlled environment<br />
• Freight product to market<br />
Wholesaler • Collection and presentation of product Wholesaler’s fee or deducted marg<strong>in</strong><br />
<strong>in</strong> a central location to buyers<br />
• Market<strong>in</strong>g produce to retailers ei<strong>the</strong>r <strong>in</strong><br />
market or direct to buyers <strong>in</strong> retail or<br />
food service<br />
• Storage <strong>in</strong> controlled environment Logistics costs to store<br />
Retailer • Presentation of product to <strong>the</strong> Retailer marg<strong>in</strong> to cover costs of<br />
consumer <strong>in</strong> retail outlet<br />
do<strong>in</strong>g bus<strong>in</strong>ess<br />
• Storage <strong>in</strong> controlled environment Costs of storage, display, handl<strong>in</strong>g<br />
ADJUSTMENT<br />
Purpose<br />
This report seeks to identify and expla<strong>in</strong> major adjustment challenges fac<strong>in</strong>g food sectors and subsectors<br />
– <strong>in</strong> <strong>the</strong> context of a study of <strong>the</strong> factors determ<strong>in</strong><strong>in</strong>g <strong>the</strong> prices of food.<br />
There are several situations where rapidly chang<strong>in</strong>g market arrangements have created<br />
adjustment problems.<br />
In this section:<br />
• key areas are identified where strong adjustment is occurr<strong>in</strong>g due to commercial forces, trade<br />
impacts or o<strong>the</strong>r external factors;<br />
• an illustration is provided of <strong>the</strong> ongo<strong>in</strong>g and recurr<strong>in</strong>g impact that drought has on food supply<br />
and pric<strong>in</strong>g.<br />
<strong>Price</strong> <strong>Determ<strong>in</strong>ation</strong> <strong>in</strong> <strong>the</strong> <strong>Australian</strong> <strong>Food</strong> <strong>Industry</strong> A <strong>Report</strong><br />
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