Articles
CONTROL OF SUPPLY AS A MEANS OF MARKETING AND PRICE FORMATION
Timing of production is of general interest to the producers of outdoor cultures, but in my opinion the timing problems are of particular interest to the growers of vegetables not suited for storing, such as cauliflower and Iceberg lettuce.
However, this is not to be misunderstood, as producers of cabbage, onions and carrots etcetera have their problems too; but when the crops are gathered in they have got time to watch the market. (In this respect I leave out of account the part of production being contractually grown for the industry).
But with perishables the marketing problems arise on the harvesting and this may result in quick and sometimes rather dramatic interventions on the sales side.
The problem is to co-ordinate the supply and the demand in force at the time in question, so that on a long view the best possible financial result for the individual producer is achieved.
Experience often shows that although a market – on a seasonal basis – has not been flooded with a certain product, the financial result for the producers has been poor anyway.
Periodic supply bulges have reduced prices so that the production expenses were far from covered.
The shortage periods – that do arise – very seldom over-cover the expenses correspondingly.
A very high price level results in a quick slacking down of the demand and it also encourages importation.
If the Danish producers are to obtain full benefit of their strongly seasonal production of cultures as cauliflower, Iceberg lettuce and Chinese cabbage the planning must start in the fields – from the time of sowing or planting – in a close co-operation among the producers and between the producer and the sales organization.
I shall try to account for the problems of this planning, and in this respect I shall give you an example of the way GASA is trying to solve these planning problems.