ADELAIDE, Aus. — Canadian and Australian farmers might live on opposite ends of the world, but they share similar concerns about port access and ownership of country grain handling facilities.
In Australia, bulk handling companies own bulk storage facilities throughout the country.
Years ago, most of the country’s bulk storage sites were publicly owned and controlled by regional authorities, sometimes known as elevator boards.
More recently, however, facility ownership has been transferred to private corporations, publicly traded companies and grower co-operatives such as Viterra, CBH and GrainCorp.
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Control of country facilities has emerged as a topic of considerable interest in Australia’s deregulated grain market.
Critics say that control of such large inventories of grain gives bulk handling companies access to important market information that should be made public to growers and traders.
In many cases, Australian farmers truck their grain directly from the combine to the nearest bulk storage site.
Upon delivery, producers can sell their grain immediately to bulk handling companies or they can retain ownership of their grain and pay bulk handling and storage fees until they decide to sell.
In most cases, farmers who retain ownership of their grain are charged an up-front handling fee, often around $10 a tonne. After that, monthly storage charges may also apply, often $2 to $2.50 per tonne.
Victoria farmer Andrew Weidemann said on-farm grain storage used to be an unknown concept in many parts of Australia.
More recently, however, it has been increasing as farmers seek to retain more control over their production and avoid recurring storage fees.
“We find it (on-farm storage) gives us more control over marketing and more flexibility at harvest time,” Weidemann said.
Peter Mailler, chair of Grain Producers Australia, said bulk storage facilities owned by large companies still make up the vast majority of country capacity.
For that reason, disclosure of information pertaining to grain stocks and grain quality is essential to ensuring that Australia’s farmers make informed marketing choices.
“The first step to getting a deregulated system that works better for growers is actually getting more transparency built into the system,” said Mailler.
“We need transparency of our wheat stocks and receivals so we can get clear signals back to farmers and enable them to make informed marketing decisions.”
Compounding farmer anxiety are questions about blending practices and grade related discounts.
Mailler said grade discounts make up a significant monetary penalty for farmers whose grain fails to meet pre-established quality standards.
“There are some incremental payment scales, but typically in Australia, we’ve got what we call cliff-face marketing, so when you go from a wheat with 13 percent protein to a wheat with 12.9 percent protein, for example, you might lose $100 a tonne,” he said.
“Right now, I don’t think there is an adequate pricing matrix in the Australian marketplace and primarily, I think that’s because there is a lack of transparency … as to what’s going on in the supply chain system.”
Leighton Huxtable, a grain grower from Karoonda, South Australia, agreed that more transparency and accountability at bulk handling sites would benefit growers.
“We know that (bulk handlers) do a lot of blending,” Huxtable said.
“As growers, we get paid a lower grade for our grain, which is then blended and turned out at a higher value. We as growers certainly don’t pick up the financial benefits of that.”
