Grower cooperative adopts dynamic pricing strategy

Regardless of the price levels other buyers are bidding, CBH is purportedly trying to reflect where the international market is and trying to price that on a daily basis (reference Shannon Beatties column in last week's FarmWeekly).

This is a significant change to a buyer's behaviour and can provide an important new piece of price discovery for Australian growers, albeit that the bids have very limited daily volume.

I'm interested to see the potential ripple effects through the Australian industry.

It has been widely reported that values being bid to Australian growers have been below the price that grain is trading in international markets on an equivalent basis.

It is acknowledged there are supply chain slippage costs and risks such as demurrage and other delays that buyers are managing.

Australian grain values typically trade between export parity (export competitive price) and import parity (price required to import).

However, prices being bid to growers have been well below export parity recently.

The bids CBH is releasing, regardless of whether you're able to sell into it on the day, provide another component of a grower's price discovery.

If growers are wanting or willing to sell at the price published by CBH, growers have the power to offer their grain at that price (or another) to all buyers using Clear Grain Exchange (CGX).

Offering your grain for sale on an independent and secure grain exchange gives all buyers the opportunity to try to buy it while ensuring you're protected by anonymity and secure settlement.

And it's an easy and efficient process.

You set the price you want for your grain, all buyers can see your grain and try to buy it, your grain automatically sells if your price is reached, you remain anonymous and retain title of your grain until funds are paid, and all paperwork is digitised, instant and recorded in your online account.

In the past 12 months 101 different buyers bought Australian grain through CGX, 65 in NSW, 54 in Victoria, 43 in WA, 31 in SA and 21 in Qld. More were searching for grain offered for sale on CGX.

There is a lot of grain still to be bought in season 22/23 to satisfy both international and domestic demand for Australian grain.

The bid and offer will come together to trade at a price at some stage and growers have some say in what this price is.