Should We Raise Our Prices?
in Agriculture & Agribusiness

The short answer

The question is never whether to lift prices across the book. It is which spot volumes can absorb an increase and how much of the 52 percent exposure will move elsewhere. What makes this harder for mixed cropping farms is structural: forward contracts cover 48 percent of revenue locking prices twelve months ahead while 52 percent spot exposure leaves ebitda vulnerable to price and water volatility. Any credible answer therefore has to hold 4,800 hectares and 24.9 percent gross margin in the same view, which is exactly where most internal analysis stops because the two live in different systems.

Changing the price on spot sales alters cash received on the next delivery without any change to the 4,800 hectares or to existing groundwater licences. Operators still avoid the adjustment because the 48 percent already locked in forward contracts cannot be touched and the remaining exposure sits directly against water and market swings.

A useful review splits revenue into the portion under forward contracts and the open spot sales, revealing which third-party intake buyers sit below the contribution needed to sustain 24.9 percent gross margin and which already reflect the value created by 71 percent packing utilisation.

Any workable increase on spot sales will cause some third-party intake to leave. A change that retains every current buyer leaves margin unrealised against the 4.1 times interest cover target.

How to tell this is actually your problem

These three together are the signature. One on its own usually points somewhere else.

✓ Forward contracts roll at the prior price with minimal discussion and spot sales clear at the quoted level on the same day.
✓ Prices agreed with different third-party intake buyers vary widely for the same product and packing slot with no consistent rule applied.
✓ Gross margin remains at 24.9 percent while input costs rise and interest cover stays at 4.1 times only because total volume has increased.

The move that usually makes it worse. Applying one percentage increase to both the forward-contract book and the spot sales, which loses price-sensitive spot buyers while still leaving the locked portion below the level the 71 percent packing utilisation could support.

Who this is for — and who it is not

It is for you if you run or finance a mixed cropping farm and almost every deal closes, and closes quickly. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.

It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.

What this looks like when the analysis is actually run

Below is an excerpt from a real run of this analysis on a mixed cropping farm. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.

The subject is Halloway Fields Group, a sample company profile used for testing rather than a customer — $51.8 million revenue from 4,800 hectares.

This is one move out of a full analysis. Read a complete report — every page, no email required.

What the engine does with this question

This question routes to Pricing & Revenue Optimization, one of 29 engagements the platform runs. For mixed cropping farms it works through 4,800 hectares, 24.9 percent gross margin, 71 percent packing utilisation and 4.1 times interest cover, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.

You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.

Questions people ask about this

How much can I raise prices without losing customers?

There is no general answer, and the useful analysis is per segment. What can be said is that the loss you fear is usually concentrated in a group whose economics you would improve by losing them.

Should I raise prices for existing customers or only new ones?

New first is safer and slower; existing is where the money is. A defensible sequence is to move new-customer pricing, watch win rate for a quarter, then bring existing customers up at renewal with notice.

What if my competitors are cheaper?

Then you are selling against them on something other than price, or you are not — and that is the real question. Competing on price without the cost structure to support it is the most reliable way to lose money at increasing volume.

Is this different in agriculture & agribusiness than in other industries?

Materially, yes. Forward contracts cover 48 percent of revenue locking prices twelve months ahead while 52 percent spot exposure leaves ebitda vulnerable to price and water volatility — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are 4,800 hectares, 24.9 percent gross margin, 71 percent packing utilisation, and an answer built on industry-general benchmarks will usually point at the wrong one first.

What data do I need before this analysis is worth running for a mixed cropping farm?

Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on 4,800 hectares and 24.9 percent gross margin. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.

When is Percision the wrong tool?

Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Does Percision replace a lawyer, tax advisor, auditor, or AI implementation team?

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.