Weather rules grain fortunes during 2015

Weather rules grain fortunes during 2015


Agribusiness
Harrismith grower David Quartermaine inspects his crop as he prepares for harvest at the end of a difficult year. The dry, fast finish, frosts, hail and fires raised quality concerns about the Wheatbelt's crops.

Harrismith grower David Quartermaine inspects his crop as he prepares for harvest at the end of a difficult year. The dry, fast finish, frosts, hail and fires raised quality concerns about the Wheatbelt's crops.

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NEWS of a respectable 2014/15 13.52 million tonne harvest opened the new year, backing up WA's biggest ever season the year before.

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NEWS of a respectable 2014/15 13.52 million tonne harvest opened the new year, backing up WA's biggest ever season the year before.

The Albany and Esperance regions had standout results of 3.4mt and 2mt respectively and summer rains had growers in the North already primed for the next season.

Falls in the realm of hundreds of millimetres filled the soil profiles for many, with Carnamah grower Bob Dempster among those celebrating after 232mm fell on his property.

The earliest break of the season on record came at the beginning of April and spurred a flurry of activity when double digit rainfall affected 97 per cent of the Wheatbelt.

But the wet was not to continue and started a frustrating pattern of dry spells, beginning in May when growers were praying for rain following a good wet and weed knockdown in April.

The rain did come, but not before dry conditions for much of June.

Two separate weather systems gave growers across much of the State their first substantial rain for a month to six weeks.

Throughout July the season held together on patchy rain for most until arguably the best mid-season rainfall for more than 15 years set up WA for a potential bumper season until a dry September riddled with frosts crushed these prospects.

CBH estimates dropped from the beginning of harvest at 13.5mt to 12.5mt as quality became apparent and weather events did their damage.

Growers around Newdegate were hit with a violent hail storm in late October with 100pc crop losses occurring across thousands of hectares before hail hit Westonia and Southern Cross the following week.

In early November, rainfall of up to 120mm in Geraldton and Kwinana ground harvest to a halt with growers worried about falling numbers and sprouting grain.

Late that month the worst first in Esperance history burnt through the Shire, hitting entire properties and crops.

The Esperance ag industry got behind their colleagues working with grain growers and communities.

Almost 100 agricultural properties in Cascade, Scaddan and Mt Merivale areas were damaged equating to an estimated 75,000 hectares of cleared agricultural land - 30,000ha of this was standing crop.

While the fires were under control after several days, four lives were lost including Cascade grower Kym Curnow and three overseas travellers working for the season.

But the community continues to rally, donations came from across the Wheatbelt and the Esperance Zone still recorded one of their biggest harvests in many years.

p GM Case

The court case between Kojonup neighbours Stephen Marsh and Mike Baxter continued in 2015 when appeal hearings on the 2014 decision were held in March.

In May 2014, Justice Kenneth Martin delivered a verdict in favour of Mr Baxter after his organic growing neighbour Mr Marsh alleged contamination from a genetically modified (GM) canola crop swathed for harvest.

Appeal judges were to decide whether Mr Baxter failed in his duty of care to manage his GM crops to protect his neighbour from contamination after GM canola was found in an organically certified paddock, following Justice Martin's decision last year.

At the same time, Mr Marsh's appeal on costs of $800,000 were put on hold after questions that Mr Baxter's defence had been financially supported by GM seed supplier Monsanto or the Pastoralists and Graziers Association WA (PGA). This also brought with it public questioning of the financial supporters of Mr Marsh's case.

In September two of the three appeal judges upheld Justice Martin's verdict.

Mr Marsh has taken his case to the High Court of Australia and made an application to be considered, but it could take more than six months for an outcome and there's no guarantee his case will be heard.

Throughout the case, anti-GM protestors made themselves seen and heard, taking the debate out of the courtroom.

The outcome of the High Court application is expected in 2016.

p GM repeal

In addition to GM featuring in court, it was a political feature of the 2015 news cycle as grower groups and politicians pushed Agriculture and Food Minister Ken Baston to fulfil his promise to repeal WA's Crops Free Areas Act 2000 before the 2017 election.

Commercial production of GM canola was first allowed in WA by the Liberal/National government in 2010, following successful large-scale on-farm trials the season before.

An exemption order was written by then agriculture minister Terry Redman allowing GM canola to be grown across the State.

Mr Baston has previously described the Act as "a piece of legislation purely designed for prohibition".

Introduced in 2003, it provides the agriculture minister with powers to designate areas of the State where GM crops can't be cultivated or specific GM crops.

It also gives the minister powers to destroy GM crops and impose a $200,000 penalty for recklessly or knowingly growing the technology in restricted areas.

According to figures provided by Monsanto Australia, the amount of GM canola planted in WA has steadily increased, with 86,000ha planted in 2010, 94,800ha in 2011, 121,694ha in 2012, 167,596ha in 2013, 260,000ha in 2014 and 337,000ha this year.

Labor's plans to remove GM canola from the WA cropping sector drew the ire of farming groups mid-year igniting debate, with Agricultural Region Labor MLC Darren West hitting the headlines.

The position was hotly contested by many, including PGA grains council chairman John Snooke who said "this position will be fought long and hard there's no doubt about that, there will be fierce opposition".

As the year went on WAFarmers and the PGA, along with several grower groups pressed the minister to move on the repeal before the next election. Mr Baston tabled the repeal bill just prior to the finish of the sittings period.

It is expected to be debated next year with Mr West maintaining his party's position.

"Should there be a change of government in 2017, we could bring whatever legislation we like back into the Parliament," he said.

"We are undeterred, it is our policy position and that was determined by our members."

p CBH Board

Long-term CBH Board member and chairman Neil Wandel retired from the board earlier this year when elections were held.

Incumbents Brian McAlpine and John Hassell retained their roles after running against competitors, while Esperance grower Simon Stead took on the District 5 role over Andrew Duncan, Dunn Rock.

Among the nominees for the 2015 positions was Bonnie Rock grower Romina Nicoletti, who was aiming to bring diversity to the board, York grower Rhys Turton, Michael O'Callaghan, Marchagee, and Lindsay Chappel, Three Springs.

The election process was marred this year when an anonymous letter calling into question the motives of CBH director Brian McApline was circulated in his zone as growers prepared to submit their votes.

Mr McAlpine encouraged growers to contact him and asked them to disregard it.

Alan Mulgrew was assigned to the CBH following Samantha Tough's resignation in late 2014.

He is the chairman of the WA Power board and holds board member positions for Adelaide Airport, Tesla Corporation and Queensland Airports.

p CBH investments, cuts and network

CBH general manager David Capper said the shipping logistics sphere changed for the better this year when the Australian Consumer and Competition Commission (ACCC) review of the Port Access codes in Australia allowed the co-operative to manage its own port access.

CBH believes there will be a $1m per year saving as a result of this approval and marketers negotiated 12.4mt of access via long-term agreement contracts and first-in-first-served commitments earlier this year for the 2015/16 season.

This is the first time this system has been available to CBH and marketers claimed increased competition, lower prices and the long-term nature of the process was a win for the industry.

In June, CBH entered the fertiliser market in a move board chairman Wally Newman said was supported by feedback as a part of on-going talks with growers.

"Farm input supply like fertiliser is something that fits in with the synergies of CBH," he said.

CBH is receiving its first shipment of fertiliser this month to Kwinana and Geraldton for growers to collect from January.

Just two weeks later CBH announced it had invested more than $40m to buy an eastern State's oat processor.

The co-operative bought Blue Lake Milling plants in South Australia and Victoria, retaining 125 staff.

It has also sown the seeds of a southern Russia grain accumulation and export arm, establishing a toehold in one of Australia's major wheat export competitors near the leading Black Sea grain port of Novorossiysk.

It has formed a Russian subsidiary company called Granary LLC which has opened an office in Krasnoda and the locally-registered company will enable CBH to own grain in Russia and operate as a grain accumulator and trader within that country.

On home soil, delays for the build of the much-awaited Albany bin at Down Road meant growers didn't have the service for this harvest.

In 2014 growers were subjected to reduced operational hours and grain receivals at certain sites as the port site was nearing capacity and awaiting ship arrivals.

These delays had been building in recent years and Albany zone manager Greg Thornton said he hoped the bin would alleviate the pressure in 2016, with construction now well underway.

The future of CBH's storage and handling network was a hot topic at pre-harvest meetings.

The meetings gave growers the chance to communicate their priorities and hear CBH's plans for bin sites, freight and ports.

"What's really important is that we understand our supply chain starts in the paddock and ends at the ship," Mr Capper said.

He outlined a key driver of optimising the supply chain was to save on costs for CBH and growers and maintain a strong network of good quality infrastructure.

Within a few months of these meetings, CBH cut 60 jobs mostly from its corporate operations in West Perth as a part of what will be on-going efforts to save $25m over the next two years.

CBH chief executive officer Andrew Crane said the cuts were the first iefforts to make operations more efficient and reduce the dollar per tonne charged to growers.

p Bunge

Bunge, a new player in WA's grain sector last July, leapt ahead in its expansion in 2015, hitting 170,000t export from its Bunbury facility.

It moved to further insert itself into WA's grain market by applying for grain storage facilities to be built in the West Arthur and Dumbleyung shires.

Bunge Australia general manager Chris Aucote said each facility would have the potential to expand.

"Growers have been asking us to look at storage and delivery options through to the Bunbury port," he said.

"We have looked at avenues including on-farm storage products and the up-country delivery arrangements we put in place for last harvest.

"We think these new bunker storage facilities will further complement the supply chain and provide growers alternate delivery options."

Building started on the two new bin sites in June and they were opened in time for harvest receivals.

p Rail and freight

Rail negotiations and freight costs remained core topics of concern for WA growers and CBH.

Protracted Tier 3 access negotiations continued between Brookfield Rail and CBH with an Economic Regulation Authority independent arbitrator determining there is capacity to cart grain on closed Tier 3 lines.

The arbitrator's determination enabled CBH to negotiate access on the lines as the decision was binding on Brookfield Rail under the Railways Access Code 2000.

With this established, negotiations opened on a long-term access proposal covering price discussions in the first month.

However, no result came from these negotiations and the industry waits to hear if CBH is to engage the ERA to make a binding decision via an independent arbitrator on the matter.

Meanwhile, the interim rail access agreement for CBH expired in May and CBH was forced to remove its trains from the tracks after the co-operative and Brookfield Rail couldn't reach an agreement

CBH agreed to a certain volume of the grain it must get to port by rail in order to secure access with an expiry of December 31.

As time went on, growers grew concerned over access being cut during the peak of grain movements, but CBH and Brookfield Rail reached an agreement of a further 12 months in November.

The terms of the agreement included a 30-40 cents per tonne increase on freight for Miling to Bolgart users.

This announcement came after CBH announced grain freight rates were set to rise by six to 10pc across the network.

Wheatbelt Railway Retention Alliance president Greg Richards called it a delay of execution for growers on Tier 3 as they wait for news on the possible reopening of their lines if arbitration goes ahead.

In addition to overseeing access negotiations, the ERA announced a review of the Railways (Access) Code 2000 which was welcomed by CBH and WAFarmers.

It asked for comments several times throughout the year and extending the submission process twice.

The review document is expected to be released next year.

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