Nathan Cattle, CGX, talks about grain selling

If you consider the way most of our grain is sold currently, the inefficiencies in the process are glaring.

Common practice is to wait for buyers to advertise their bids for the day and then react to it.

The waiting and reacting behaviour often creates angst because we're thinking "should I sell today or hold", "will the price keep going up?", "I wish I sold some grain on that last price spike!".

When we do decide to sell, we then need to engage buyers.

This is often done via the phone or email.

Bids that are advertised by buyers are typically indicative.

That means growers need to negotiate to get their real buy price.

We then want to check the bid against a number of other buyers to make sure it's a good price.

This means calling or emailing other buyers, negotiating and often waiting for a response.

The buyer with the highest bid is the one we go back to for one last negotiation before selling the grain.

Sometimes the bid can be withdrawn because the buyer has got their fill and pulled their bid lower.

You are then forced to revert to the next best bid and hope that it is still available.

The process is clunky, inefficient and often results in growers or their consultants dealing with only a handful of buyers because that is what they can manage.

Sometimes it means missing the price opportunity all together.

Buyers often become frustrated and feel like they've been played off in a Dutch auction.

When we do finalise the deal, it is regularly done via a verbally binding contract over the phone.

A 1000 tonne sale at $450 per tonne is a $450,000 transaction often completed over the phone in a verbally binding contract, reliant upon each party making notes on either side of the phone and then providing confirmation in an email which is hopefully correct.

If we've got this far, we now have to transfer title of our grain to the buyer and then wait for payment as an unsecured creditor.

Once paid we may then receive additional paperwork from statutory authorities asking us to declare our varieties to pay end point royalties, or possibly levies and other grain selling costs.

We then manually enter the contract details into our accounting software being very careful not to make an error.

No wonder many growers find selling grain stressful.

The process is cumbersome and makes it very difficult for sellers of grain to find buyers of grain and buyers to find sellers.

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It's hard to manage a multitude of buyers, it's hard to do the diligence before selling to an unknown buyer as an unsecured creditor, and there's lots of potential for human error.

The result is farming neighbours often sell the same grain on the same day at different prices or are selling to buyers that may not have the highest demand and price for their grain.

Rather than wait for a handful of buyers to tell you their price and react to it, why not jump on the front foot, have confidence and tell ALL buyers the price you're willing to sell for?

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

All you need to worry about is what price you want for your grain.

All buyers can see it and try to buy it, your grain automatically sells if your price is reached, you retain title of your grain until funds are paid, and all paperwork is digitised, instant and recorded in your account.

If you are a bit unsure of your sales price, start higher.

You're anonymous at all times so no price is a silly price, and you can reduce your price at any time if you wish.

Last season there have been 43 different buyer businesses buy grain through CGX in Western Australia alone.

There were 41 buyers in the Kwinana port zone, 29 in Albany, 19 in Geraldton, and 17 in Esperance.

There were more buyers searching and wanting to buy Western Australian grain.

We have more than 300 buyers registered on the exchange.

The exchange also makes it easier for your consultant to get your price to market and in front of as many buyers as possible so they can continue to focus on adding value to your business.

It costs nothing to have a CGX account set-up and nothing to having your grain on offer.

Plus you can edit or cancel your offer for free at any time before it sells.

If your grain sells the cost of using CGX is $1.40/t and we always recommend factoring this into your price.

The costs are broken down into $1/t which is how CGX gets paid; whilst the other 40c/t covers secure settlement of your contract (20c/t is charged by CBH as a title transfer fee, 10c/t is charged by CGX's independent custodian Perpetual Ltd, and 10c/t covers National Grower Register fees).

If you use CGX correctly, it can only add value to your business.

Let's work together to create a more efficient and sustainable grain industry whereas many buyers as possible are trying to buy our grain.