Price Discovery is the process that determines market prices
Successful free markets are defined by the price discovery mechanism: a self-correcting system that allows all players to manage the many variables that impact their businesses.
The farmer remains the owner of the product until it is sold. Agents represent farmers, helping them find buyers at the best possible prices. The challenge is to decide what price to sell the product at. That’s where price discovery comes in.
Price discovery is led mainly by the interactions between buyers and sellers, with price fluctuations influenced by demand and supply dynamics, logistics and transport forces, weather and production challenges. In the fresh produce world, perishability, quality, continuity, branding and product in-elasticity also play a big role in establishing the right price for the farmer.
Agents work with farmers to take advantage of the price discovery mechanism, which means farmers are always able to respond – quickly – to the real world events impacting their businesses and the sector as a whole.
Great systems, great price discovery
Putting the farmer first and giving them the power of effective price discovery requires transparency and cost-consciousness. Our systems, people and processes deliver on this crucial frontline because we are entrepreneurial by nature.
With over a quarter of a century of experience operating in a fast-moving free market system we’ve developed a unique way of working that sets the best practice standard within the greater ARC Group, and across the fresh produce industry as a whole. We use various tools to deliver information services to traders, producers, management, industry bodies and the public.
RSA Group information services
- National fresh produce market sales comparisons based on sales value, mass and Rand per kilogram.
- Historic trends across 250 product lines and for 20 fresh produce markets are available.
- Producer sales performance reviews, comparing producer’s performance against markets.
- Custom reporting focusing on requests from producers.
- Providing information used for production planning of new varieties and containers.
Converting information into business intelligence is, ultimately, the heart of our business. This intensive use of information allows us to give them the full benefits of effective price discovery and to monitor, measure and analyse sales performances proactively. This puts the RSA Group trader in a unique position to make informed decisions around price, demand and supply dynamics.