WITH a need to ship at least two million tonnes of grain more than it ever has before, the CBH Group has turned to its growers and shareholders for assistance.
This past harvest, the co-operative received a record 21.3mt, which was 30 per cent higher than its previous record.
While the amount was nothing short of extraordinary, it left CBH with a significant export task ahead this year with 17mt of shipping capacity from the CBH system fully booked by exporters of WA grain.
The most CBH had ever shipped previously was 15mt and to date this year it has already exported 6mt.
A spokeswoman for the co-operative said they have already put in place measures to increase shipping capacity to meet the 17mt.
"This includes renegotiating our road contracts to make them more sustainable and introducing a new rail service provider, Aurizon, who will bring an additional three rail fleets to complement our existing fleet," the spokeswoman said.
However, in an unusual strategy, CBH also plans to use its own growers to assist with the mammoth task ahead for 2022.
"CBH is also finalising initiatives that will focus on getting growers to help with the task of transporting grain from site to port either through growers dedicating their time or loaning their truck to help boost capacity," she said.
"This includes growers helping to deliver a load of grain on their way to pick up fertiliser or lime, or they can directly contract to CBH to transport grain from upcountry sites closer to port."
While it's been recognised as a great idea, WAFarmers grains section president Mic Fels said it would be interesting to see the level of farmer take-up as growers were already pressured with a lack of staff.
"I struggle to see how we're going to get a lot of extra tonnes to port using rail as CBH have already factored that into their 17mt, so I understand we have no choice but to look at road options," Mr Fels said.
"At the end of the day there's not going to be anyone thing that fixes this, so we need to look at ways to get 100,000t more here and there to hopefully get us to an extra 1-2mt before July."
According to Mr Fels, exporting as much of the crop as possible into the first half of 2022, before the northern hemisphere harvest commences, was critical to capitalise on the highest prices ever seen for grains across the board.
"At the CBH Annual General Meeting, chief financial officer Stewart Hart calculated that not doing so would cost Western Australian growers in the order of hundreds of millions of dollars," he said.
"Western Australian grain is now selling at fire-sale prices, $60 to $200/t below our competitors, as a direct result of our inability to export our crop fast enough.
"The ports themselves have more than enough capacity, the bottleneck is shifting our grain from bin to port."
In a letter sent to growers last Thursday, CBH chief operations officer Mick Daw outlined the four options available to growers to help with that exact problem.
Subcontract to a current CBH road contractor
This involves growers subcontractor to a CBH road contractor and receiving retention incentives paid directly by CBH.
Grain forward haul with Cropline Haulage
Growers would take grain from a CBH site to port and back haul their lime or fertiliser to farm.
It's currently available from Piawaning, Wickepin and Wagin, however sites are changing regularly and new sites will be communicated next month.
Lease your prime mover or trailer to Cropline Haulage
For this, growers are guaranteed minimum revenue and agreed profit share per net tonne kilometre (NTK).
It is currently available in the Kwinana North and South zones with drivers to be managed by Cropline and vehicle maintenance to be offset on a pro-rata basis against revenue earned.
Directly contract to CBH and cart grain for select routes
An expression of interest is required before work can be allocated, plus contracting and onboarding with CBH will be required.
However, it attracts premium NTK rates for all routes.
"All these initiatives provide you with flexibility, certainty and a premium financial incentive, regardless of whether you work for CBH or one of our road contractors," Mr Daw said.
While plans are afoot to get the 17mt out on the water, it still leaves CBH with more than 4mt of carryover grain in the system heading into the 2022/23 harvest.
With farming practices improving, new breeding lines coming through and growers consistently able to do more with less rain, another huge season is certainly a possibility.
Additional permanent storage has long been on CBH's radar and construction of it is an ongoing mission, but it may not be enough if WA growers were to have another good year and deliver more grain than the previous 14.2mt average.
Mr Fels has no doubt CBH is acutely aware of the problems carryover grain poses as it directly affects their operations.
"I think what will end up happening is that they will ship more grain before harvest, but they're looking at it from the perspective of reducing carryover which is important, but they're not looking at it from the perspective of max value for growers," Mr Fels said.
"I think it'll happen late in the year and unfortunately all bets are off once the northern hemisphere crop comes off in terms of what the prices are going to be."
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