This is a topical issue, and we acknowledge that it may strike a nerve.
After all, growers across the country are under pressure. Costs are rising, labour is tight, and margins are thin. So, it’s natural to hope that better prices might be the answer.
But here’s the uncomfortable truth: higher prices alone won’t make you more profitable. And if that’s the foundation of your business model, you’re likely building on shaky ground.
Let’s unpack why this matters and what you can do about it.
The Temptation of the “Price Fix”
There’s a common belief in the industry:
“If I could just get another $2 a tray, we’d be in the clear.”
“If supermarkets paid fairly, we’d be thriving.”
We’re not here to downplay those frustrations.
Fair pricing absolutely matters, and we’ll be the first to back calls for better transparency, equity, and value recognition across the supply chain. That conversation is essential and ongoing.
But this article isn’t about debating fairness. It’s about business survival. And that starts with a hard look at what you can control.
Because when it comes to your profit margins, the market doesn’t care about your input costs. Retail buyers don’t run their pricing decisions off your power bill, freight charges, or fertiliser spend.
So, relying on price—something largely out of your control—as your main lever for profit? That’s a dangerous strategy.
What the Last Decade Has Taught Us
Let’s be honest: prices in horticulture haven’t changed much over the last ten years.
Sure, there are seasonal spikes—weather events, supply shortages—but they’re temporary. The baseline hasn’t moved significantly. Meanwhile, growers have seen their cost base creep up year after year:
- Labour costs are increasing due to policy changes and workforce shortages
- Input prices are rising due to global supply chain disruptions
- Overheads—fuel, electricity, compliance — eating into margins
The result? Even growers selling at the “high end” often find themselves breaking even, or worse, running at a loss.
Profit isn’t about what you sell for—it’s about what you keep after everything else is paid.
The Real Driver of Profit: Cost of Production
This is the number most growers either:
- Don’t know precisely, or
- Don’t track consistently across the business
Yet it’s the single most important figure in determining whether you’re operating sustainably.
If your cost of production is $26 a tray, and you’re chasing $28 just to survive—that’s not a business strategy, that’s a hope strategy.
What happens when the price drops to $24? Or $22? That’s where good businesses start bleeding cash.
Growers who understand their true cost of production, on the other hand, are in the driver’s seat. They can make better decisions, adapt more quickly, and avoid chasing unattainable margins.
So What Can You Control?
You may not be able to shift the market, but you can shift your own numbers. Here’s where to start:
- Know Your Numbers
Sounds basic, but many growers are operating without a clear understanding. Know:
- Your per-unit cost of production (by crop, block, or variety)
- Your break-even price
- Your overhead structure and its impact on margins
And here’s a big one:
Do you know your operating efficiency?
That’s how much it costs you to generate one dollar?
At Planfarm, we aim for horticulture businesses to operate at 70% efficiency, meaning it should cost you 70 cents to make a dollar. That leaves 25 cents to cover:
- Overheads
- Finance
- Drawings
- And critically, reinvestment into the business
If your number is higher than that, your profit is being squeezed before it even hits the bank.
- Increase Efficiency
Look for those 1%ers that will help you shift the needle. Are there ways to:
- Improve labour productivity?
- Automate repetitive tasks?
- Simplify logistics or packaging?
Often, small process improvements compound to create significant savings.
- Improve Consistency
The highest price in the world won’t help if you can’t deliver a consistent, saleable product.
Focus on:
- Stable & saleable yields
- Reliable quality
- Efficient harvest timing
- Separate Emotion From Decision-Making
You might love growing a certain crop, but is it actually profitable?
Understanding enterprise-level performance (not just whole-farm averages) allows you to make hard calls about what stays, what goes, and where to reinvest.
What We’ve Seen at Planfarm
We work with hundreds of growers across Australia, and the story is often the same:
- One grower gets $2 more per tray than their neighbour
- But their cost of production is $4 higher per tray
- End result? Same crop, same region—but one is profitable and one is barely holding on
It’s not about price. It’s about structure, discipline, and clarity.
When you know your numbers, you can:
- Set realistic income targets
- Make confident investment decisions
- Assess new market opportunities
- Build a buffer for the tough seasons
Shift From “More” to “Better”
Many businesses think the answer is scale.
“Let’s plant more hectares. Push more volume.”
But more doesn’t always mean better.
Doubling your volume with the same inefficiencies just doubles your risk.
Instead, ask:
- How do I lift profit per hectare?
- How can I maximise the potential of the same team or equipment?
- How do I build resilience into the model?
You’re not just a grower—you’re a business owner. Profitability comes from managing both sides of the equation: income and cost.
The Bottom Line
If your business model depends on higher prices to survive, you’re playing a dangerous game in a volatile market.
But if your business is built on understanding, controlling, and improving your cost of production, you’ve got leverage.
Profit isn’t about charging more.
It’s about knowing more.
Knowing your numbers.
Knowing your operation.
And making decisions that put you in control, not the market.
If you’re ready to move beyond chasing prices and start focusing on what truly drives profitability, Planfarm is here to support you.
We partner with growers to build businesses that are efficient, data-driven, and built to last—where decisions are backed by insight, and profit isn’t left to chance.
