A TRIAL to split APW stacks into APW1 and APW2 could deliver price benefits to WA growers producing high quality wheat this harvest.
For the first time, CBH will trial the additional APW1 wheat grade which will align WA to Grain Trade Australia commodity standards and will be open to all grain marketers as a common stack segregation.
CBH will provide services for both the existing APW2 grade with minimum protein of 10 per cent and the new APW1 grade with a minimum protein of 10.5pc during the coming harvest.
CBH operations manager David Capper said grain marketers had indicated demand for higher protein wheat.
"By offering the APW1 service, it provides marketers with more certainty that they can meet customer's specifications when that grain is delivered," Mr Capper said.
"In turn we'd expect that growers may see a premium for the higher protein, where it meets APW1 spec."
Mr Capper said in order to ensure growers got the best value for their grain, CBH needed to make sure segregation services were aligned to market need.
"We know that most export standards for milling wheat call for a minimum of 10.5pc protein whereas our standard has always been a minimum of 10pc with APW2," he said.
"Traditionally we have been able to manage the quality on outturn, especially when protein averages are higher across the zones, but we need to look long-term and ensure we can meet customer requirements year in and year out.
"The trial will give us some insight into how we can manage the two grades and meet these needs."
CBH general manager of marketing and trading Jason Craig said the co-operative had looked at the possibility of introducing the additional wheat grade over the past 12 months.
"It was clear this season that the demand continues to increase to 10.5pc and that is why we started to make these changes," Mr Craig said.
The trial follows CBH's virtual high protein segregation trials during the past two harvests including APW111 in 2012/13 and APW105 in 2013/14.
Mr Craig said growers would be able to deliver APW1 this harvest depending on their protein levels.
During the trial CBH will not provide the full quality optimisation functionality for APW1, and growers will be able to opt out of, but not into the new grade.
"Now growers have an APW1 price spread," he said.
"That spread will depend on where the market is at any one time for the protein and on the supply and demand.
"Customers are demanding 10.5pc rather than 10pc, we're meeting those customer requirements and obviously giving the grower the benefit from it.
"The spread would range somewhere between $2-7 per tonne, it will always range between AH and APW, at the moment we are at about the $2/t mark.
"When protein markets are tight you could see that spread increase."
Mr Craig said CBH needed to ensure it could still manage the quality on outturn, and by keeping the optimisation limited to this trial year, it would gain a good understanding of the effects and potential issues on outturn.
"We'll then know for certain if we can introduce APW as a standard grade in future seasons," he said.
Mr Craig said there had been widespread calls for the APW1 grade and until now WA was the only State to use APW2 with a 10pc protein minimum as the core milling grade.
"Our eastern Australian counterparts use APW1, with a minimum of 10.5pc protein as their base grade," he said.
"The demand for 10pc protein minimum is shrinking and the trial will allow us to better adapt to our customers' needs."
The demand for 10pc protein traditionally contains a blend of hard and soft wheat varieties, which delivered mixed results to flour millers and CBH customers, who preferred 10.5pc protein wheat in order to achieve a more consistent flour quality.
As growers shift to hard varieties such as Mace, CBH believes it will be better served with APW1 segregations.
The segregation will also allow WA to better meet the growing demand for higher quality wheat into South East Asia, the State's largest market and main growth sector for Australian wheat in the next decade.
Newdegate grower Roley Marchetti said any situation where growers were rewarded for producing quality grain, even if only a few dollars per tonne more, would be a positive for the industry.
As a hard wheat grower with a Mace dominant program, Mr Marchetti hoped farmers would receive greater returns for producing high quality grain as a result of the trial.
"The main advantage we have in the international marketplace in WA is quality and if you can get a bonus for APW1, I think it will be a huge advantage for growers," Mr Marchetti said.
"We should be paid for our quality because that is our edge."
Badgingarra grower Colin McAlpine agreed with Mr Marchetti.
"It is quality milling wheat these markets want, so if we could separate the higher quality and get paid for it that is positive," Mr McAlpine said.
He said the new wheat grade would give growers an incentive to chase quality where possible.
"It's all about marketing, we know our grain is clean and green, we just have to convince the buyers to pay more for it," he said.
"Hopefully if we can provide higher quality they will pay for it."
