A regional officer with grain marketer Agfarm believes that the role of central marketing agencies acting as a bridge between growers and end-users will grow even bigger in the deregulated grain market.
Brad Knight, Horsham, Vic, office manager for Agfarm, said that farmers were looking for an easy way to market their grain.
Speaking at last week’s Wimmera Machinery Field Days, Mr Knight said he had been run off his feet with inquiry.
“Farmers want to be able to target the best price, but many have said that they just don’t have the time to make the 25 phone calls necessary each day,” Mr Knight said.
He said that with the opening up of the grains industry, smaller players are emerging and there is a need for intermediary services in the marketing supply chain.
For instance, some of Agfarm’s key buyers are businesses that choose not to deal directly with the market.
They prrefer to target the larger parcels of grain available through similar brokerages or marketers.
Mr Knight said farmers are no longer necessarily dealing with an export-focused market, and that with many commodities, there is strong demand from local end-users.
But these are not necessarily widely known by the growers.
“We’ve got offices right down the east coast and in Perth and it gives us that information which allows us to find out exactly what the market is doing.”
Mr Knight said information would become ever more critical in a more fragmented market.
“The days where the big buyers would buy up just about all the grain are over, and there are more players targeting specific products from specific areas, so you really need to know where you stand in relation to marketing to get the best prices for your grain.”
“Whether that is by taking the time to go through all the information out there or whether it is by outsourcing to businesses such as Agfarm, farmers are changing the way their grain is marketed.”
He said the first year of deregulation had proved successful for Agfarm.
“We’re flexible with how we market the grain for growers – they could come to us with a parcel of grain and a nominated price and let us get in touch when we get a buyer, or they could come to use directly with their grain.
“Obviously, we’d rather have farmers think of us straight away when they are marketing.”
Mr Knight hopes that, due to the ease of access to online information, meaning they do not perceive as big a need for regional representation, a move from the larger buyers towards centralisation, would work in favour of Agfarm.
“With our agencies across the place, we’ve got excellent market intelligence and that is increasingly valuable in the new climate.”
The Agfarm brokerage model has won plaudits from the farming sector, with farmer groups such as the Victorian Farmers Federation (VFF) endorsing the system as a good way for farmers to tap into a larger buyer base.
Mr Knight said Agfarm is also using innovations such as Clear Commodities online trading house as a means to market grain.
“It will depend on the uptake from both growers and buyers, but we think that the Clear platform is a good idea in theory and we will certainly use it.”
Email a friend