GRAIN marketers are offering a raft of different products in order to try to attract tonnage as the industry gears up for the coming Australian harvest.
And while there will be more specialised products likely to better suit growers’ individual needs, farmers will also have to work hard to line up the various options available to ensure they are comparing ‘apples with apples’.
Marketing staff from AWB and ABB speaking at a Birchip Cropping Group (BCG), Vic, field day last week acknowledged the issue of differing ways of representing price options, payment structures and costs made a thorough comparison necessary.
AWB national accumulation manager, Jon White, said the discrepancies between various pool products were a huge problem.
“It’s something Grain Trade Australia (GTA) has a committee working on, but we haven’t come to a satisfactory arrangement yet,” he said.
Luke Mason, ABB business strategy and risk manager said it was an issue farmers would have to look at when making their marketing decisions this year.
Meanwhile, marketers are unveiling more sophisticated products tailored to certain sectors of the market as the industry gets used to working in a deregulated environment.
ABB has followed up the talk of more regionalised pool structures which have dominated discussions of marketing trends. ABB became the first of the big marketers to follow the lead of smaller businesses and is offering a specific Eyre Peninsula pool for feed and malt barley and wheat for the 2009-10 season.
ABB pool manager Anthony Fitzgerald said the business would focus on regionalised marketing opportunities.
“For the coming harvest, we will be offering regional pools to allow growers in the specific catchments to benefit from particular advantages of the grain in their region,” he said.
ABB wheat trader Michael Cole-Sinclair said the company was also reacting to grower demand by reintroducing Golden Rewards quality payments in wheat – where increments will be paid for protein, moisture and screenings.
It goes against the philosophy of marketers last year who said that as they were only getting stack average out of the bulk system, they could not pay growers increments on individual loads.
Mr White confirmed AWB would again not be making quality payments.
“If APW wheat is worth $200/t, that’s what we will pay, rather than $195/t with increments.”
AWB’s major thrust in the marketing game will be its early commitment premiums, which have proved popular – with the $15/t premium fully committed and the $10/t offer filling fast.
Other options, such as maximum wash-out fees, are another hook designed to win tonnage from growers reluctant to forward contract grain due to fears of production risk.
In WA, CBH continues to push its loyalty payment, where growers will get a rebate if the marketer attracts sufficient tonnage to make efficiencies of scale, cutting marketing costs.
GrainCorp has a number of products, such as its warehouse cashflow, where growers can get a cash advance for grain in warehousing, and its deal with online clearing house Clear Commodities, which it has developed in the past two years.
Along with the big four, a score of smaller marketers and co-operatives are also clamouring for grain, meaning growers will have a massive array of choice this harvest.
While the long-term future of pools may be cloudy, the marketers at the BCG field day agreed that this year at least, with the combination of depressed prices and the likelihood of at least Australian production, pools may account for a reasonable proportion of grain sold.
“As a means to smooth out the peaks and troughs they are likely to have some attraction for growers,” Mr White said.
With the market likely to be at a low level, many growers are expected to pool grain and hope for the pool to be able to pick up on any price lifts into 2010.
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