As you will all have noticed the price for possum fur has dropped to $110 /kg. Harvesters are always asking me when will the price go up, or I have been told it is going to go to $200/kg. There are some fundamentals that all harvesters need to understand and be aware of if they are going to get the best return for their efforts
The first one is that possum fur is a commodity just like wool,meat, raw milk,logs etc,and as such the price is governed by supply and demand.For possum fur when demand is high and customers want your product then you have a market,if the supply of fur does not meet the demand then customers will offer more to secure their needs ,and the price goes up. On the negetive side when the amount of fur on offer is more than the customers require then the price goes down. this is the basic law of supply and demand. Ask any farmer ( all farmers are commodity producers) and they will tell you that unless you understand supply and demand, and conduct your business accordingly them you will not prosper in a free market.
The second thing that fur harvesters need to understand is that all commodities have a price point,which when exceeded makes that commodity to expensive for the customer ,and they will look for alternatives.
All of you who have been in the harvesting business for the last five years or so will remember how pleased they were when possum fur reached $145/kg,and I can remember many hunters telling me with firm conviction that it was going to go to $200/kg.So why have prices dropped in the last couple of years, why are you not getting your $200/kg
The simple truth is that possum fur priced itself of the market. There is a whole chain of businesses that add value to possum fur the spinner,the knitter, the wholesaler and the retailer. All of them have to make some profit, or they would not be in business. At the end of this value adding process the finished goods have to purchased by the retail customer, if the goods are to expensive then the customer will look for better value for their money
The domestic market has understood this well for many years, it was international demand that drove the price to the highs we saw several years ago. International customers have now realized what the domestic market already understands, that there is a point at which possum fur becomes uneconomic
So all you hunters out their remember this when the price gets beyond what the market can tolerate there will always be a re bound in the other direction,this is the current situation now
In other word be careful what you wish for
Cheers
Steve
The first one is that possum fur is a commodity just like wool,meat, raw milk,logs etc,and as such the price is governed by supply and demand.For possum fur when demand is high and customers want your product then you have a market,if the supply of fur does not meet the demand then customers will offer more to secure their needs ,and the price goes up. On the negetive side when the amount of fur on offer is more than the customers require then the price goes down. this is the basic law of supply and demand. Ask any farmer ( all farmers are commodity producers) and they will tell you that unless you understand supply and demand, and conduct your business accordingly them you will not prosper in a free market.
The second thing that fur harvesters need to understand is that all commodities have a price point,which when exceeded makes that commodity to expensive for the customer ,and they will look for alternatives.
All of you who have been in the harvesting business for the last five years or so will remember how pleased they were when possum fur reached $145/kg,and I can remember many hunters telling me with firm conviction that it was going to go to $200/kg.So why have prices dropped in the last couple of years, why are you not getting your $200/kg
The simple truth is that possum fur priced itself of the market. There is a whole chain of businesses that add value to possum fur the spinner,the knitter, the wholesaler and the retailer. All of them have to make some profit, or they would not be in business. At the end of this value adding process the finished goods have to purchased by the retail customer, if the goods are to expensive then the customer will look for better value for their money
The domestic market has understood this well for many years, it was international demand that drove the price to the highs we saw several years ago. International customers have now realized what the domestic market already understands, that there is a point at which possum fur becomes uneconomic
So all you hunters out their remember this when the price gets beyond what the market can tolerate there will always be a re bound in the other direction,this is the current situation now
In other word be careful what you wish for
Cheers
Steve
RSS Feed
