HAS the inability to get grain from the country to port in a timely manner potentially cost Western Australian growers and the State's wider economy up to $3 billion?
Based on the size of last year's crop, BusinessAg consultant David Falconer seems to think so and while the precise figure is up for debate, he is not alone in his concern.
His maths was simple - an average price differential of $150 per tonne multiplied by an estimated 20 million tonnes of grain for the 2021/22 harvest.
"The price drop for canola has been higher, it was $1200/t and is back to $750/t, wheat has fallen from more than $500/t to $350/t and barley has dropped from $480/t to $330/t," Mr Falconer said.
"In reality $150/t could actually be conservative, but if we use that as an average across all commodities, then we're looking at $3b.
"With this large lost opportunity we need to consider more radical and lateral solutions to the grain supply chain."
For Thomas Elders Markets commodity analyst Andrew Whitelaw, it's a bit more complicated to put an exact number of the money lost, however it's something he has been warning farmers about for almost two years.
While growers would be noticing fairly hefty discounts at the moment, those discounts actually started at the end of the 2020 harvest, once the country came out of drought, and has been there ever since.
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Mr Whitelaw said while getting grain to port was part of the problem, there was more to it than that.
"Growers keep asking when it will go to a premium again, but the fact of it is that it likely won't happen until we get an average or below average crop," Mr Whitelaw said.
"The reality is both 2020 and 2021 were big crops in WA and there is another one expected this year, so buyers have no fear of missing out.
"It's the basics of supply and demand, which is economics 101 - if you have a lot of something, it's going to sell for less."
While there is general economics at play, the logistical issues in getting grain from the country to port have undoubtedly added to an already difficult situation.
Global grain prices have been extremely high for the past six to eight months, ever since the invasion of Ukraine, and the quicker customers are able to access grain, the more they're willing to pay for it.
"The more grain you can get on a ship and out of the country, the more you can access that premium price," Mr Whitelaw said.
"If you can get the grain to the customer quickly, you can increase the ability to access the market and if you can't access the market, then you can't access the premiums it might be offering."
While Mr Whitelaw wasn't able to put an exact figure on the loss, WAFarmers Grains Council president and Williams farmer Mark Fowler had heard from his marketers that a loss of $100/t across the entire crop was a conservative estimate.
With the price of fertiliser two and a half times more than what it was last year, chemicals up 30 to 40 per cent, fuel up 20-30pc and even labour costing more than ever before, there's a lot of money coming out of farmers' bottom lines.
Mr Fowler said the disparity in grain prices meant there was a lot more risk in planting a crop because there was much less margin to play with.
"You really can't afford to make an error and we can't afford any natural events, such as frost or heat shock, which we have no control over," Mr Fowler said.
"The price of fertiliser and chemicals are based on global factors and they reflect the current high international grain prices, but if we're not participating in that commodity upside, then there is a fundamental mismatch.
"It's critical we can sell our grain at a price which matches what we have to pay for inputs - no one is giving us a discount on the price we're paying for urea or glyphosate, so we can't afford to be giving a discount on our grain."
Looking to the future, the grain pricing issues are unlikely to go anywhere given the current estimate is for WA to produce another 20mt crop.
That means there will be even more grain available to contribute to that supply and demand dichotomy, as well as ongoing logistical problems which CBH Group has a 10-year plan in place to solve.
According to CBH, the carry-over by the end of September is estimated to be about 5mt.
However with expected above-average shipping in October, the co-operative expects that figure to reduce to about 4mt before harvest starts.
"The CBH team is continuing efforts to outturn as much grain as possible before harvest starts, however due to last year's record crop, carry-over will be higher than normal," said a CBH spokesman.
Mr Falconer said as long as there was excess carry-over in the system and an inability to get grain on ships quickly enough, WA growers would be looking at a discount to the world market.
"We're going to carry-over at least 4mt from last year and bring in another 20mt this harvest, which puts us at 24mt of grain in the system," he said.
"If we can only ship 17mt per year, then by the time we get to the 2023 harvest, we're looking at 7mt or more in carry-over.
"Some people are suggesting they will store grain to be sold next year and traditionally that would have worked, but when we're looking at potentially having 7mt still in the system, there will be no price increase next year."
