High density planting as an economic production strategy: (d) economic assessment and industry implications

High density planting (HDP) can increase cane yields by about 60 tonnes cane per ha (TCH), and an appropriate multi-row HDP farming system with supporting planting and harvesting equipment is now under test. However, commercial adoption of HDP will depend on the economic benefit to growers and its broader implications for the transport, processing and marketing sectors. A gross margin analysis of the economics of close rows and an assessment of the sensitivity to key cost factors was conducted using representative variable production costs and average yields for four regions of the industry. In each region, the adoption of high density would increase the growers' gross margins by more than $1000/ha/year and reduce their production costs by more than $5/tonne of cane. A yield gain of only about 5-10 TCH is required for close rows to be more economic than 1.5 m rows and the higher yields mean that close rows remain more attractive than 1.5 m rows at lower sugar prices and lower CCS values. Benefits from close rows are insensitive to most production costs, but the actual requirements for cane grub control (e.g., suSCon) have yet to be resolved. The impact of increased production from HDP on the transport, processing and marketing sectors will vary with mill area. If mill capacity is under-supplied, HDP can increase production without any need for expansion. In areas where the mill is close to capacity, growers can adopt production neutral strategies for close rows and optimise their returns.