GrainCorp enters fray on stocks info

29 Sep, 2017 02:45 PM
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Mark Palmquist, GrainCorp managing director, says grain stocks in on-farm storage need to be included in any potential stocks reporting scheme.
Mark Palmquist, GrainCorp managing director, says grain stocks in on-farm storage need to be included in any potential stocks reporting scheme.

THE major bulk handler of grain on the east coast, GrainCorp, has spoken out against the push for a mandatory stocks reporting system to be implemented across the country.

Grower groups, including national peak body Grain Producers Australia (GPA), have been lobbying hard for a greater degree of stocks reporting from major bulk handlers across the country.

They are advocating for the release of information by pay grade by port zone, including sold and unsold grain stocks.

The grower groups want to see a scheme mandated by government, claiming there is not sufficient value in the information currently voluntarily disclosed by the major bulk handlers.

However, GrainCorp managing director Mark Palmquist said while his organisation supported stocks information being released to the public, he said it should not be mandatory and that on-farm storage of grain needed to be included in any program.

“GrainCorp supports stocks information disclosure that can generate value for grain growers and the industry,” Mr Palmquist said.

“We also support a voluntary scheme that provides a full picture, including all storage providers and grain held on-farm.”

Mr Palmquist said any scheme that ignored stocks held on-farm or in smaller bulk handling facilities would be so flawed as to not be worth it.

“A scheme that ignores a large portion of the crop would not lead to the best outcome,” he said.

“It would lead to decisions being made on big assumptions and potentially distort the market.”

However, Pete Mailler, a former GPA chairman who played a key role during his time with GPA in pushing for more detailed stocks reporting, said the key would be getting the major bulk handlers to release more information.

He said that as export volumes and domestic use were both able to be relatively accurately estimated, the industry could work out what was being stored on-farm by subtracting supplies in the bulk handling from the estimated use patterns.

“You can get a reflection on what is going on regarding on-farm stocks, the key is to get more detailed and more timely releases from the bulk handlers,” Mr Mailler said.

He nominated a figure of 10,000 tonnes of storage as the cut-off for being required to provide information.

“I think the small private storages and large growers would have the necessary record keeping skills to be able to provide the stocks information we are after,” Mr Mailler said.

Mr Palmquist said he did not feel stocks information models such as that suggested by GPA would be in the best interest of growers as it revealed too much to competing foreign interests.

“The interests of growers and industry are actually strongly aligned on this issue – we all want strong international demand and the best possible price for Australian grain,” Mr Palmquist said.

“To include grain quality data would be difficult as this data could be used against us by competing supply chains in other parts of the world.”

Mr Mailler said he felt from a farmer perspective the major concerns were a lot closer to home than international buyers.

“We see bulk handlers aggressively using their inside information of stocks positions for their own advantage,” he said.

Mr Palmquist said another key plank of the GPA model, the breaking up of grain into sold and unsold classifications, would be logistically difficult.

“Disclosing uncommitted grain would also be challenging as we simply don’t have this information,” Mr Palmquist said.

“We do not know on delivery if the farmer has sold their grain or if it has been pre-committed.”

Mr Mailler said he felt the management of receival sites would be sufficiently sophisticated to allow the bulk handlers to tell what the status of grain was.

“It would not be too difficult to work out based on the warehousing invoices sent out,” he said.

Mr Palmquist said his company felt a system based on the US model of stocks reporting could work in Australia.

The US system gives information by commodity by State, with all commercial bulk handlers and farmers providing data which the US Department of Agriculture uses to make its official estimate.

GrainCorp has suggested such a report could be generated quarterly for most of the year, rising to monthly over the harvest period.

Mr Mailler said an independent report had valued detailed stocks information at between $3 and $5 a tonne.

He said arguments bulk handlers could not give out certain information due to commercial in-confidence issues were flawed as they were providing a service in storing the grain, not the owners of the grain.

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FarmWeekly
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media

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