WELL-known agribusiness, Elders, has announced an overhaul of its grain marketing business to provide a more holistic and independent transaction offering to clients, complementing a 20 per cent acquisition of Clear Grain Exchange (CGX).
Targeting growth and innovation as directed by the Eight Point Plan, Elders will utilise more than 440 points of presence across its national network to make it easier for both growers and traders to buy and sell grain in Australia.
By doing so Elders aims to create a more efficient market and ultimately return value at the farmgate and the Australian grain industry as a whole.
Previously known for accumulating grain on behalf of buyers, Elders has evolved its model to now act as an impartial party to grain transactions.
Elders national grain manager Lachlan Allan said the new Elders Grain model was positive for growers, buyers and the grain industry.
“Our model aims to leverage the Elders network to drive more liquidity in the Australian grain market and help establish true value for grain,” Mr Allan said.
“We will combine our existing technology with CGX’s trading platform and settlement services to offer our clients a more complete offering when they look to sell grain.
“Growers can simply call 1300 ELDERS and our team can provide all current bids for grain.”
Alternatively, if growers have a sell price in mind and current bids are not at that level, Elders can act on their behalf using CGX to help them set their price and let all buyers bid on their grain.
“The change to our model has been driven by client feedback and market research,” Mr Allan said.
“Evidence indicates growers can often be overwhelmed by searching for grain prices and results in grain trading at different values in near-by locations for the same grade.
“Elders Grain now has the benefit of achieving true price discovery by facilitating grain transactions in a single market place.
“Our aim is to make the process of buying and selling grain in Australia much easier and more efficient.”
Elders general manager of agency, David Adamson said the investment in CGX, combined with the changes to the operating model, was in line with Elders’ core business of being an independent agent that creates value at the farmgate.
“CGX is an important piece of industry infrastructure and our investment in the platform, along with the other changes to our model, will provide clients more options when it comes to selling their grain.”
CGX traded more than 1.2 million tonnes last season and averaged $4.40/t above the best public bid as collected by independent analyst, Profarmer.
“CGX’s technology and the value it creates is proven, unrivalled and well aligned with Elders’ service offering to growers.” Mr Adamson said.
Clear Grain Exchange managing director and owner Nathan Cattle said they were excited to have Elders utilise their trading engine and settlement services.
“We believe the Elders network can help educate growers and other parties on the benefits of the exchange and generate volume on the platform, which is good for growers, traders and all other grain marketing professionals,” Mr Cattle said.
“CGX’s vision is to be an industry utility providing transaction services and improving market forces for Australian grain.
“Importantly, the minority investment by Elders in CGX ensures any dealings between the parties remain at arms-length.
“Operations of the exchange and service to our customers continue to be completely independent and confidential at all times.”
Mr Cattle said both parties were committed to the long-term value creation at the farmgate.
“We will achieve this by working with all parties in the industry to improve price discovery and make it easier for all buyers to purchase growers’ grain whilst ensuring they are protected at all times,” Mr Cattle said.