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Market Price Reporting - Methodology

There has been little change in the way that fruit and vegetable market prices have been collected over time. This is probably because there has been little or no change in the way that trading occurs within the market. Also there has never been a legislative requirement for open and accurate disclosure of selling prices at any point within a transaction. Whilst trading continues to occur primarily through private treaty transactions, the traditional method of independent market reporters interviewing a cross section of sellers and buyers for each commodity classification to determine selling prices on the day is as relevant today as at any other point in time. The most significant change within the Industry has been in the relationship between growers and wholesalers in the way that produce is handled. There has been a move away from agency style transactions to the point where virtually all dealings are now carried out on a merchant style basis. This change has heightened the need for a totally independent source of pricing information to try to level the playing field. Whilst there are other possibilities for sourcing wholesale prices, each involves significant challenges of its own. 

One option would be to record all sales data at the point of sale on the selling floor. This would require uniform or fully compatible software programs throughout the Industry, a comprehensive product description language which incorporated sizing and grade specifications, and uniform legislative provisions and policing mechanisms to ensure full compliance. For the data to be meaningful and useable for comparative purposes each seller would need to key an absolute minimum of seven critical elements for each and every sale. This would need to be done consistently by all sellers for all sales every day. This is a desirable option but unlikely to be achievable without significant political intervention and strong industry support. The cost alone is an obvious impediment.

It has often been suggested that buyers should be interviewed to find out what they are paying on the day and the information compiled into a report. This would require their full co-operation at a busy time whilst they are engaged in buying, loading etc. since they could be spread over half a State once they leave the market. Also, buyers may not know what they have actually paid for produce until they receive their sales documentation, often the next day. Without comprehensive sales records the issues of accurate product descriptions, origins and packaging are again very much to the fore. Virtually every buyer in the market would need to contribute to ensure a comprehensive coverage. At the present time, under current practice, buyers can have and do have an input.

Another potential source of fruit and vegetable market prices would be to stream price data from credit service records. Whilst this process might appear to offer the answer, there are some potential pitfalls. The take up of centralized credit service facilities by buyers varies between markets. Some major buyers refuse to use the credit service facilities at all. Wholesalers would not take into account their brokerage sales where the produce does not enter the market. Sales records would be misleading on the day if only the lesser quality portion of a line is sold with the best quality unsold and hence not recorded. Reported prices, and especially average prices, could be distorted and misleading because of the higher proportion of lesser quality lower priced produce sold to non credit service buyers. The breadth of information on packaging, origin quality etc. that is necessary to give any true meaning to prices is again a major issue. Errors in sales records can be significant but are not usually resolved until some time later through a discrepancy mechanism. Indicative prices for received but yet unsold produce would not be included even though they are a vital component of any meaningful market intelligence.

A Market Report based on grower returns has also been proposed with growers recording their return prices for various commodity classifications on a common website. This does have some merit in allowing individual growers to compare their returns against their peers. However, it would not assist growers, at all, in determining whether or not those return were fair in comparison to the prevailing market price on the day. In fact, the information could have a detrimental effect by masking inequities where selling fees were uniformally distorted. There would also be some significant issues with uniformity in determining and recording product classifications necessary to allow for fair comparisons on a like for like basis.  

The process of compiling market price reports through the traditional method of interviewing sellers and confirming the information with buyers where necessary allows for first hand sighting of produce to assist in the correct determination of packaging description and product classification. Incorrectly described lines are detected and the records rectified accordingly. Indicative pricing is an important element that is adequately addressed. New product and packaging descriptions can be introduced immediately to deal with changing circumstances. Timeliness is of the essence and detailed, comprehensive reports can be compiled and distributed early on the same day.

The accuracy of Fruit and Vegetable Market Reports is proportional to the take up rate and usage by all sectors of the Industry. If wholesalers contribute willingly to the content and are aware of what is being reported, buyers use the reported prices for determining the validity of what they are being charged, and growers use them to determine the fairness of their returns the system is self checking and likely to be most accurate. Buyers and growers are the key elements to ensuring the highest level of accuracy and they are also the greatest beneficiaries.   

Independent market reporters have no vested interest in the price of any product on the day. They are driven by the need to compile the most comprehensive and accurate information possible which in turn fuels demand for reports and ensures them more secure employment prospects. Reporters do not invent the prices that they publish. Those prices are sourced directly from wholesalers who are ultimately responsible for their accuracy.