Farmers shop around for storage gains

25 Dec, 2016 02:00 AM
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The days of simply trucking all your grain to the nearest tip-off point are over.

GRAIN producers are looking carefully at the strengths and weaknesses of their local bulk handling options before making deliveries in order to maximise returns this season.

"The days of simply trucking all your grain to the nearest tip-off point are over, especially in areas where there is strong competition in terms of bulk handlers," said Grain Producers Australia (GPA) chairman Andrew Weidemann.

"In our local area in the Wimmera (Victoria) there are a range of different storage options and farmers are assessing them according to their strengths and weaknesses," he siad.

"The prices posted are set by a combination of the depth of the buyers available and the efficiency which the grain can be turned out, whether that is for the export or domestic market.

"It is a good thing for growers to have that competition for their grain and the sites that are getting it right and cutting costs are winning out."

Market Check director Brett Stevenson said farmers had to make their choices carefully.

"With a lot of grain being warehoused, it is important they are not making the decision on simply the cash price on the day of delivery," Mr Stevenson said.

"You might have a case where the headline price is way above other quotes on a specific day and reflects one buyer looking to accumulate grain quickly.

"When the farmer comes to market grain down the track, that higher bid may not be there.

"We advise growers to really look out for where the competition is strongest and there is a good group of buyers."

Mr Weidemann agreed.

"Finding a site with good depth of bids and good liquidity is very important for growers looking to maximise the price they are paid," Mr Weidemann said.

Mr Stevenson said having an understanding of the likely future home of the commodity being delivered was also important.

"You have some sites with very efficient rail access and these facilities are where the exporters are looking to accumulate from, whereas domestic buyers may be happy to buy from these sites, but also will not mind buying from places that are road-only."

Mr Weidemann said growers also had to decide whether additional truck freight costs to get the grain from the paddock to a site they believed offered a superior opportunities was worth it.

"When you have sites relatively close together it is probably not a big deal, but if you are going further you want to be sure it is worth your while."

He said growers also looked at harvest flow issues such as turnaround times when making their delivery decisions.

"Especially when bad weather is on the horizon, turnaround times are very important," he said.

FarmWeekly
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media

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