SUPPLY chain fees for CBH Group graingrowers are set to increase by $2.20 per tonne this season, with the co-operative announcing both the grower receival fee and the exporters' port terminal shipping fee will increase by $1.10/t each.
It takes the receival fee which growers have to pay to $11.35 per tonne for wheat, while the marketer fee becomes $20.25/t for wheat for export, meaning in total CBH supply chain fees are now $31.60/t.
The fee increase was announced in a letter sent to CBH shareholders last Wednesday, with the co-operative citing the increasing average crop size and goal to increase export capacity as the reasons for the change.
In the letter, chief operations officer Mick Daw said CBH sets supply chain fees by considering the capital investment required in the network, the expected tonnes delivered by growers for the coming season and the operating cost structure.
"To ensure the sustainability of the network and accelerate improvements, we have decided to increase supply chain fees for the 2022/23 season and allow for a moderate increase in debt, as was communicated to growers last year," Mr Daw said.
"The fee increase will be consistent with last year and will be applied equally to both the growers' receival fees and exporters' port terminal shipping fee.
"Looking ahead, any future changes to supply chain fees will at least reflect any increase in inflation and consider the requirements of the supply chain at the time."
Last year, CBH lifted fees by the same amount and forecast at the time that it would increase them by a similar amount again this year.
Looking towards 2023, the co-operative expects fees will be raised again next year in line with inflation, but a dollar figure has not yet been forecasted.
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Ultimately, the supply chain fees are put in place to fund necessary projects and developments, with more than $1 billion invested in 2.8 million tonnes of permanent storage, more than 80 throughput enhancement projects and more than 400 sustaining capital projects over the past six years.
Mr Daw said CBH's strategy had a clear objective to have the ability to receive an average 22mt crop and out-turn 70 per cent in the first-half shipping window by 2033.
"Based on this, we need to accelerate and increase our ability to get the crop to port and to customers more efficiently, as well as expand permanent storage and improve the existing infrastructure throughout the network," he said.
"Over the next 12-24 months, we want to make sure we get the investment underway to increase our tonnes to port performance.
"Currently we're operating at about 1.6mt per month and we need to get that up to 2mt in order to get the crop out early into the market which pays higher prices in the first half of the year."
By 2033, CBH has set its sights on increasing export capacity to a peak of 3mt each month, which will help to generate price value for all growers, both current and future.
Mr Daw said the important message for growers was that the co-operative has a clear plan on where it wants to invest and what the value of that investment will be.
"We've got strong beliefs that getting tonnes to port early by increasing the performance of the supply chain is what is going to create value for growers and that's going to be brought about by the fee increase," he said.
In terms of projects, the additional 290,000t of permanent storage to Shark Lake, Dumbleyung and Cadoux are the key components due to be completed in time for harvest this year.
While work is underway to get approvals in place for the much hyped rapid rail facilities, with Moora and Broomehill to be the first two to kick off and hopefully followed closely by Cranbrook and Brookton.
