To pool or not to pool, that is the question

31 Jul, 2009 02:00 AM
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GRAINGROWERS have continued to support pooling as a preferred selling option, despite the removal of the national wheat pool in 2008-09 and the accompanying speculation which suggested they would turn away from them in droves.

Grain Pool senior manager Bryce Banfield said of the estimated 6.65 million tonnes of grain sold to CBH last year, 60pc was sold into pools, and 40pc for cash.

Mr Banfield said growers still found pools an attractive option for their business and predicted the trend would continue, despite speculation of their eventual demise.

"One thing that we were anticipating in the lead up to last harvest, was the volume of grain that would be sold for cash and what would go to pools," he said.

"The industry was saying it would all be sold for cash but we found that not to be the case."

Grain Pool general manager Brian Mumme said choosing between cash and pools was an expectation of the market at the time of selling, and the priorities of individual growers.

He said the grower's cash flow position was also a determining factor.

"There are many variables around the choices between pools and cash, and it will be interesting to see how it all evolves going forward," he said.

Mr Banfield said the ratio of pools to cash would vary from year to year, based on the grower's personal circumstances.

The timing of when they need payment for their produce would determine if they choose to use cash or pooling products, he said.

Mr Banfield said it was too difficult to predict what the ratio between pooling and cash would be this season.

"It's up in the air," he said.

"It is hard to say because in the northern Wheatbelt, if they have another good year, they may go more towards pools because they don't have the same requirement for cash.

"However, some growers may be quite prepared to get cash and pay tax.

"It really depends on the growers' individual circumstances, which way they go."

Mr Banfield said he was not surprised that 60pc of the wheat, barley, canola and lupins sold to CBH last year, went into pools.

"We were actually pleased by the result," he said.

Read full story in this week's Farm Weekly.

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