Price comparisons are very useful for keeping key aspects of production and distribution under control in any type of industry. In agriculture, this comparative method is highly relevant for maintaining an adequate presence in the market and marking differentials that always put the brand one step ahead of the competition.
In this article we will teach you the details of price comparison, its impact on the agricultural sector and how the comparative percentage is calculated.
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What is price comparison?
In simple terms, it is the process of comparing the prices of agricultural products to determine the best selling value for those products. This may involve comparing the prices of the same products from different suppliers, or comparing the prices of different products to determine which is the most profitable.
Price comparison is important for agri-food businesses because it allows them to make informed decisions about buying and selling agricultural products. By comparing prices, farmers and business owners can identify the best deals and maximize their profitability.
Comparison of agricultural prices
Comparing prices can help farmers determine which crops are most profitable at any given time. If the price of a particular product is high, it may be beneficial for the farmer to plant more of that crop to maximize profits. On the other hand, if the price of a product is low, the farmer might choose to plant less of that product or even consider switching to a more profitable crop.
Secondly, comparing prices is also important when deciding how to sell agricultural products. Farmers can compare the prices offered by different buyers, such as grocery shops, supermarkets, wholesalers or processors, to determine which offers the best price. This enables them to make better decisions about who to sell their produce to and to get the best possible price.
How can price comparison increase the return on an agribusiness?
There are several ways in which comparing prices can boost the performance of an agricultural business:
Identify suppliers with competitive prices
Comparison shopping allows farmers and business owners to identify suppliers with the best prices. By comparing prices from different suppliers, farmers can find the best prices for the farm inputs they need, saving money and increasing profitability.
Identify the most profitable products
This method can also help agribusiness owners to identify the most profitable agricultural products. By comparing the costs of different products, it can be determined which products are the most profitable to produce and sell. This goes hand in hand with calculating the production, processing and distribution costs of each product.
Negotiating lower prices
With the right information on prices and medium-term projections, agri-food businesses can negotiate more affordable prices with suppliers. Knowing the prices of products on the market is key to saving money and increasing the profitability of an agribusiness.
Make informed decisions about the sale of agricultural products
Price comparison also enables agri-food business owners to make data-driven decisions about the sale of agricultural products. With a clear idea of the most competitive prices for products on the market, producers can determine the best time to sell their products and obtain the best possible price.
Compare prices, but take future profitability into account
Comparing prices to improve a company's profitability does not always mean choosing the lowest price. Whether you're the seller or the buyer, the price of products is determined by their quality, features and performance, so you need to choose your price wisely.
For example, if you price your products too low in the belief that this will attract more customers, you may generate a public perception that your products are of inferior quality to the competition. The key is to provide a competitive price, but one that reflects the differences in your product.
Similarly, when you buy inputs, in many cases the low cost will cost you dearly and you will have to spend more in the medium term. So it's imperative that you consider convenience, customised options and future sustainability. This could lead you to pay more now, but reduce expenditure later.
For example, in coffee growing, solutions such as Jiffy Pellets represent a significant saving in the future thanks to the benefits they offer. The use of Jiffy Pellets avoids the use of plastic bags, which contaminate the soil and harm the root development of plants. What's more, they are highly practical transport devices that save on labour.
Its use in seedlings is decisive for many coffee growers, as the sterile peat of Pellets prevents the phytosanitary problems that are common when using land from the same farm, which can be contaminated by nematodes and fungi that can damage a large part of the seedlings.
We hope you find this information useful!
Price comparison is an important tool for farmers and business owners in the agricultural sector. By comparing the prices of agricultural products, farmers and business owners can identify competitively priced suppliers, identify the most profitable products, negotiate lower prices and make informed decisions about the sale of agricultural products. By doing so, they can increase production at the right time and improve the return on their agribusiness.
CHowever, it is important to consider the full crop cycle to determine the true price difference, and it is advisable to include variables such as productivity, field mortality rate, germination and rooting rates, production cycle, disease mortality, etc. None of these variables come into play in determining the price difference. None of these variables are included in the nominal prices, and it is important to advise you and your supplier on the guarantees on these types of variables so that you can make a truly informed decision.
You'll certainly want to know how Jiffy strengthens the ground with sustainable solutions! Find out more about our products and how they make agribusiness more sustainable.