THE State and Federal governments have been encouraged to drive further investment in Australia's agriculture supply chains so they can keep up with the sector's international competitors.
Following Western Australia's record breaking crop of 24 million tonnes of grain for the 2021 season, and a 30mt crop predicted within this decade, Grains Research and Development Corporation (GRDC) chairman John Woods said the industry needed to "keep up" with its global competitors by capturing advantages within its grain supply chain wherever possible.
"Many people think we have a lot of advantage in South East Asia, but we are only running at about $5 to $7 on shipping advantage to our main competitors in the Ukraine and Argentina," Mr Woods said.
"Argentina, even though they have massive sovereign risk there, are spending $US2.8 billion on their supply chain right now and they are emerging as a big competitor to us and they're looking at our markets."
Comparing the price it costs for various countries to get their grain to port, Mr Woods said the Canadian market was moving its grain a distance of about 1800 kilometres from Saskatchewan to Vancouver for about $A65 a tonne.
He credited Canada's lower grain freight costs to the country's move to "super trains" which can carry anywhere from 10,000-11,000t to 15,000t per train unit.
"I move my grain from Goondiwindi to Brisbane for about $38/t and that's only about 340km away," Mr Woods said.
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Mr Woods said broadly speaking, Australia's grain port facilities were well supported and invested in by the private sector and organisations including the CBH Group, but that the government needed to prioritise and drive more investment in the space.
CBH Group chairman Simon Stead said it was important to acknowledge the grain handler was shipping grain faster than it ever had before.
When asked if the sector's shipping slots were being allocated in the most effective way, Mr Stead said CBH needed to take a longer-term view.
"All of our customers that we deal with that ship grain, complain to us about allocation, particularly first-in, first-served, so we ask for input for a better way to allocate the entry capacity," Mr Stead said.
"I think we have to take that longer-term view - when there is excess demand, everyone wants it and when there is no demand we can't get anyone to sign up to a long-term agreement.
"Our customers say to us 'you need to be flexible' and that means to them, you need to give us the capacity when we need it and take it back when we don't need it, so that's very difficult for us."
Mr Stead said the group needed to have the ability to "flex up" while also being mindful of the capital trade-off.
"If we hadn't had a network that could deliver what we needed this year we would have been paying for it for the past 10 years without using it, so it wouldn't be capital efficient, so we need to keep that in mind as we build for the future," Mr Stead said.
