Taking notes on market for oats

27 Feb, 2017 02:00 AM
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Blue Lake Milling's Dimboola site in Victoria is one of three processing facilities, with a second site in Bordertown in South Australia and a new plant being established at CBH's Metro Grain Centre in Forrestfield, Perth.
There is a lot of interest from Asia in various oaten products - they recognise its health benefits.
Blue Lake Milling's Dimboola site in Victoria is one of three processing facilities, with a second site in Bordertown in South Australia and a new plant being established at CBH's Metro Grain Centre in Forrestfield, Perth.

THE GROWING niche market opportunities for oats have seen WA-based agribusiness CBH increase its oat processing capacity, both through its Blue Lake Milling (BLM) business in South Australia and Victoria and a new oat processing plant in Western Australia.

BLM relationship manager Lydia Rich said it had been a busy harvest period for the business.

"It has been a really good story, we put in a new bunker at our processing facility at Dimboola in the Wimmera, Victoria and filled it to capacity," Ms Rich said.

She said a lot of the business was from forward contracts.

"Farmers took the opportunity to lock in some good prices of close to $300 a tonne earlier in the year for human consumption oats.

"With the strong yields we saw this season, growers that had the contracts in place said oats were one of their best gross margin performers."

However, Ms Rich acknowledged there was further work to do to develop the oat industry in south-eastern Australia.

"Oats were a very big crop in areas like the Wimmera years ago before falling out of favour when farmers got access to a wider range of crops, such as oilseeds and pulses."

She said this year, in line with other feed grains such as barley and lower grade wheat, oat prices were disappointing at harvest time.

"The returns at harvest were definitely not as good for those who had contracts locked in.

"We have done some research and found that if we want to win back acres from wheat, oat prices need to be at similar levels to APW wheat and they weren't at harvest so that is something we need to work on."

Ms Rich also said logistics would be important in growing the industry.

"We need to ensure farmers have a convenient location to deliver the oats - they are not taken by major bulk handlers so that is something we are working through."

She said Blue Lake received oats at its facilities at Dimboola and Bordertown, in South Australia this year, along with Marnoo, Ararat and Serviceton, Victoria.

Ms Rich said the future was bright for oats, with markets opening up in Asia.

"There is a lot of interest from Asia in various oaten products, they recognise the health benefits of the grain," she said.

"The buyers are also demanding higher quality standards to meet the growing consumer demand."

Ms Rich said the emphasis on high quality products would flow back to the receival standards.

"It will be critical to have high quality product to market, to ensure that we are able to maintain our preferred supply status with key customers.

"Blue Lake Milling will maintain a strong focus on quality with oats entering into its processing sites and with third party storage providers."

In terms of the processing supply chain Ms Lake said Blue Lake was processing the oats locally and then exporting them.

"With certain grains they are exported and then processed, but with oats it is cheaper to process them in Australia, which is great for the region as you get processing facilities such as those at Dimboola and Bordertown."

Ms Rich said she was looking forward to hearing more about farmers' oat planting intentions at next month's Wimmera Machinery Field Days.

However, she is far from just focusing on one crop.

"Blue Lake bought oats, but CBH was also active buying all other major commodities, including wheat, barley and canola.

"We were one of the strongest buyers of canola in the Wimmera this year.

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
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READER COMMENTS

THE FARMER
1/03/2017 2:54:16 PM, on Farm Weekly

At a $114 per tonne i feel like we have been bent over & abused .They went out of their way to encourage oats . Disappointing really dosnt quite embrace the rage , anger or disbelief .
Rural Realist
17/03/2017 3:16:09 PM, on Farm Weekly

Reality of supply and demand. I remember many oat marketers including CBH saying while they were optimistic for oat demand they wouldn't doubling acres, which is what we did.

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COMMENTS

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Well done Steve,it is easy to see why Purchers have been so successful over 5 decades
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Reality of supply and demand. I remember many oat marketers including CBH saying while they were
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At a $114 per tonne i feel like we have been bent over & abused .They went out of their way to