Cane Crush Crisis How Sugar Quality Can Shape Our Local Economy

The 2024 Cane Crushing season wrapped up on the 18th of December, leaving a number of sugar cane crops still standing in the fields. While this premature end signals a direct loss for local businesses, it's not just the unharvested cane that could have lasting effects—it’s the quality and sugar content of the cane that really matters.
The key measure for growers is Commercial Cane Sugar (CCS), a standard used to assess the sugar yield from the crop. Growers are paid based on both the volume of cane they harvest and the CCS levels, which reflect the quality and sugar concentration. If the CCS falls short of expectations, it can mean a significant financial hit, with some farmers even receiving no payment at all. This typically becomes a concern in January when payments are processed and payment adjustments are made.
While many in the Hinchinbrook region are aware of the impact these fluctuations can have, the wider community may not realise how closely the quality of the sugar cane is tied to the prosperity of local businesses and families.

Cane Season Effects Whole Region

At the beginning of a cane season, grower collectives in the Herbert River district, such as QCAR and Canegrowers, will nominate what they believe their estimated commercial cane sugar (CCS) maybe for the season based upon data from prior seasons. Growers are then paid by the mill based on an average calculated from their estimated CCS. If the CCS is not reached, then growers may not receive payment, or they may be paid less to match the correct average.

Queensland Cane, Agriculture & Renewables (QCAR) Herbert District Manager and Senior Agricultural Officer Lawrence Di Bella produced the following table, demonstrating the importance of CCS.

CCS level                             Cane price/t                      Gross return/ha
(costs to grow and harvest the crop must be deducted from this amount to reflect the net return /ha) 
 
12                                         $51.04                                 $4083                                  
13                                         $57.34                                 $4587
14                                         $63.64                                 $5091

Calculations are based upon the following assumptions:
   • $700 tonne of sugar price
   • 80 tonnes/ha crop assumptions. 

“Our district average usually hovers around an annual 13 to 13.5 units of CCS based upon a five-year rolling average. It's really important to make sure that we try to keep that average up as high as possible,” said Lawrence.

“If the CCS drops below six, then the mill does not pay the grower at all, leaving the grower meeting all harvesting and production costs. At the end of the 2024 harvest, we did see some growers achieve CCS levels below six leaving them out of pocket.”

“It’s a balancing act between getting good CCS and high yields, with the weather playing massive roll in what outcomes a grower can achieve from their crop.”

Lawrence also calculated that cane farmers brought into the district in excess of $200,000,000 gross income into the district from last year’s crop.

President of Hinchinbrook Chamber of Commerce Mary Brown said that, to her understanding, there will be significantly reduced revenue coming into the district from sugar in January because of the lower-than-average CCS received last year”.

“It does have a direct impact on the spending capacity across the community, which does flow on to each and every business in some way, shape or form,” she added.

“When you add that to the already significant cost of living pressures, where it's known nationally that disposable income is already quite limited, this is another layer of pressure.  

“What it also does is when people are feeling cash flow constraints, they tend to become more conservative in their spending because of the uncertainty.”

The period after Christmas is usually a slow period for businesses, but Chamber reiterates that this time of year is more important than ever to help our local businesses.

“It's those small businesses that are there to help with sponsorship of schools fete, sporting organisations and broader community events,” said Mary Brown.

“Those businesses contribute a lot through sponsorship or donation, so it’s a great way for us, the consumers, to give back and support them during this challenging time.

“The potential impacts could be that there might be reduced trading hours and we've already seen it during this slower January period.”

The Hinchinbrook Chamber of Commerce says that now is a good time for businesses experiencing quieter months to review their operations. The chamber is also hosting workshops to help businesses with their professional development.