The sugar cane industry experienced a significant decline in profitability in 2007-08, with prices easing and input costs rising.
Low profitability is likely to continue to be a major challenge for sugar cane producers in coming years. For some producers, this will result in diversification into alternative agricultural industries, or exiting agriculture entirely. However, the presence of economies of scale gives small and medium sized producers a significant economic incentive to expand the scale of production in order to reduce costs and enhance sugar cane profitability.
In coming years, there is a need to continue monitoring the impact of global price changes and further changes in input costs on sugar cane producers’ profitability. Such information is vital for developing sound government and industry policies to help guide a viable sugar industry in Australia. |
