There is no easy way to sugar coat the state of the late season domestic market. In all honesty growers should be very disappointed.
January through March recorded good volume sales with limited retail promotional activity. Industry forecasting was much in line with expectation with no indication of any pending late season surplus of supply. Following an initial Covid-19 downturn trading bounced back with strong retail demand and an increase in value. For good sized class 2 product $25 to $30 OGR became the norm.
How then, do we find ourselves in mid-May with values plummeting? Sales values have dropped week on week across May to the point that OGR values today are close to half of what they were in April.
We find it difficult to understand that a packer and marketer is prepared to publish a market report to its grower group boasting that they control 40% of the current weekly packed volume whilst not alluding to inaccurate forecasting which has placed grower returns under extreme pressure. We are now ten days away from the anticipated start of new season supply. Our retail partners and consumers must be somewhat confused by the yoyo of fluctuating values that some marketers are announcing to the retail trade.
Forecasting and management of crop flow is an essential ingredient in creating a stable market. Growers need to be asking some hard questions regarding current returns.
Glen and team