Fruit farming industry is highly competitive as every farmer chases his opportunity to succeed. Farmers not only strive to produce high yields and high-quality fruits but also to sell their fruits at competitive prices and acquire higher profits. Most farmers face a challenge surviving on the local and export market due to factors of demand and supply.
When done as an agribusiness, fruit farming is a profitable venture that relies on natural processes. To achieve success, farmers should aim at employing unique farm management practices. Each practice can bring overwhelming results. These farm practices range from land preparation, planting, tree management during the vegetative growth stage, harvesting, marketing, and packaging. To get higher profits, farmers try to put the maintenance costs to a minimum.
What Should you Know Before Deciding on the Fruit to Plant?
Crop requirements – different fruits have varying requirements. For instance, strawberries, passion, and grapevines are more delicate and susceptible to damage compared to citrus and crop such macadamia. This means that more care is required by these plants. Different requirements illustrate that varying finances are required to manage these crops. Farmers should invest in crops that fit their financial possibilities.
Market – the demand for fruits varies depending on either on the season, nutritional value, and consumption. Markets for most agricultural produce are seasonal and only make good money when the demand is high and the supply is low.
Durability – Some crops such as strawberries and bananas are perishable and cannot be stored for longer periods. If farmers are not ready to adapt to fluctuations in the demand for perishable fruits, they should consider investing in fruits that can be stored for a certain period such as macadamia.
How does demand relate to supply in Fruit Farming?
Demand describes the number of goods that a customer is willing to buy at a certain price at a given period. Supply means the amount of goods a farmer is ready to offer on the market at a given price and period. The relation between supply and demand determines the prices of fruits in the market. There are two concepts fruit farmers should know:
The Demand and Supply Determine the Market Price for Fruits
When farmers set high prices for a certain fruit, the demand and supply reduce. When they set low prices, the consumption increases hence an increase in demand and supply.
The market price determines the supply and demand for fruits
When the market price is high, the interest of farmers to invest in a certain crop will be high. What will happen later? Flooding in the market when the fruits mature in the same period leading to a sharp fall in prices. When the market price is low, the demand and supply will increase as the interest of consumers rises. At this time, few producers will show interest in the crop and hence the chances of selling at competitive prices when the crop matures are high. When the prices are low, farmers make less profit and at times are forced to sell at distress prices.
How do you Find a Balance Between Demand and Supply?
Demand and supply will always fall and rise until market equilibrium is achieved. For instance, if tangerine prices are too high, most consumers will shift to other fruits retailing at affordable prices. This will force the farmer to lower the prices until the demand for tangerines increases. When the demand and supply are balanced, the market is considered to be at equilibrium.
Farmers make more profits in markets that are not controlled. This is because the demand and supply dictate the market prices for fruits. Fruit farmers should regularly monitor demand and supply curves and turn the information into profit. Adequate information will help them regulate the entire market competition. For instance, if the supply of avocados to China is high, the prices will be low and hence they can shift to markets in Europe and Mauritius where there are less competition and better prices.