Nov 1, 2022ProducePay survey uncovers price volatility concerns
A recent survey ProducePay shows that buyers and growers see price volatility as a primary challenge to day-to-day operations, and fair pricing terms are elusive for growers when selling their products.
The survey, released by ProducePay in October, examines the daily challenges of U.S. produce growers and buyers, shining a light on the immediate needs around improving efficiency and profitability in the produce supply chain – particularly as the industry contends with record inflation, rising production costs, supply chain disruptions and extreme weather.
A diverse group of produce growers and buyers across the U.S. participated in ProducePay’s national survey, and their input revealed a shared desire for greater access to trading partners and greater security in pricing across the produce industry. These common concerns were especially prevalent when asked about price volatility.
According to the survey’s findings, 48% of growers and 47% of buyers identified price volatility as one of the primary challenges to managing their day-to-day operations. Additionally, 68% of growers surveyed said that being able to reach fair pricing terms is their major pain point when it comes to trading.
“There’s an urgent need to bring more transparency and efficiency to all aspects of the global produce supply chain,” Pablo Borquez Schwarzbeck, CEO and founder of ProducePay, said in a news release. “Underpinning many of the survey responses we received was a resounding plea for the kind of price stability that only happens when trading partners have direct access to one another and can reach more agreeable and profitable business terms.”
Since its launch in 2017, ProducePay’s marketplace has been a premier platform for pre-vetting and matching growers and buyers, empowering them to make transactions directly with each other. Members of ProducePay’s marketplace also receive the trade protection needed to give
growers and buyers alike the assurance that they are conducting safe transactions and purchasing quality products.
To offer its marketplace users more transparency into pricing data, ProducePay recently enhanced its pricing data visualization feature to allow buyers and growers to view pricing indexes based on transaction histories from both the U.S. Department of Agriculture and ProducePay marketplace transactions for over 30 commodities. With this new tool, users are able to see pricing and movement data to evaluate fair pricing of their own trading on ProducePay’s marketplace.
“As a new member on ProducePay’s platform, it has been very important to find a strategic partner that provides me valuable information about the U.S. market,” Pablo Carlos Garcia Lopez, owner of Fresh4All LLC in McAllen, Texas, said in the release. “The biggest challenge I face is being unsure of how to price my product and compete with other producers when conditions change from one day to the next.
“It has been extremely helpful to have a broader understanding of current pricing trends so that I am making more informed decisions when selling my Persian limes on the marketplace,” Lopez said in the release.
While produce growers and buyers align on growth hurdles, some perspectives revealed in ProducePay’s survey diverged. These include their recommendations for the best way to eliminate post-harvest waste. The overwhelming majority of growers (57%) said that having access to more buyers was the most effective means of eliminating waste, while buyers identified greater transparency into a grower’s sustainability practices as their most effective tactic.
Additional highlights from ProducePay’s survey include:
- Nearly 43% of buyers indicated they have trouble finding consistent growers to purchase from, and 41% of buyers said they have difficulty finding enough supply from growers;
- 40% of buyers said they currently look for new growers through acquaintances, 31% of them look for growers at trade shows and only 10% use online marketplaces;
- 50% of growers said that they have difficulty finding consistent buyers;
- Nearly 45% of growers agreed that being unable to expand and diversify their portfolio is stunting business growth;
- More than 43% of buyers said that sustainable practices are one of the requirements they look for in a grower, besides their production capacity and certifications;
- The majority (55%) of buyers also said their companies have carbon reduction targets;
- 50% of growers said that implementing sustainable practices is extremely important to them; and
- Most growers were already implementing protected agricultural practices (70%) and crop rotation (61%).
As sustainable practices become more of a global imperative, another key insight from ProducePay’s recent survey is that produce growers have major concerns about the financial burden of sustainable practices. Approximately 53% of the growers said that their primary challenge with implementing these practices is that market pricing does not allow them to recuperate their investment costs – which will stall the produce industry’s efforts toward reaching carbon neutrality.
Providing growers with the instructional and financial resources to advance their sustainable efforts continues to be a priority for ProducePay. One way the company has been innovating in this area is by launching a first-of-its kind carbon offset program designed for the produce industry. It allows growers to earn residual income for their sustainability efforts by selling verifiable carbon offsets on the international market.
For more information about ProducePay or services available on its marketplace, please visit www.ProducePay.com.
PHOTO: Pablo Borquez Schwarzbeck, right, ProducePay founder and CEO, talks with a grape grower. PHOTO: Produce Pay