DISCONTENTMENT with grain prices they believe are well below international parity has led a group of east coast grain growers to investigate the possibility of forming a grower co-operative to market grain, which they believe will help deliver better returns.
Many of the growers involved with the push were former supporters of the single desk marketing system.
Mark Hoskinson, Kikoira, in central west NSW, said while growers acknowledged a wheat single desk in today's diversified grains industry would not be practical he felt there was strong grass roots support for a grower owned marketer.
"We've all diversified and no longer just grow wheat so having the former wheat single desk set up would not work even if were possible but we feel that on the east coast something like what CBH does in Western Australia could be a real win for the producer," Mr Hoskinson, a former leader of the NSW Farmers grains committee, said.
He said the Australian Competition and Consumer Commission (ACCC) into grain market supply chains proposed by the nation's two grain grower peak bodies, Grain Growers and Grain Producers Australia (GPA) could be followed by a feasibility study into the viability of a large co-operative.
"We'd have to have something large, what we have seen is that small local co-operatives can be successful in the short-term but they tend to get picked off over time," he said.
However, Grain Growers chairman Brett Hosking was not sure of the merits of pushing for a co-operative.
"We think that an inquiry into the operation of the grains industry supply chain is long overdue to have a serious look at how the industry is working, but at the end of it I am not sure that setting up a co-op wold be the solution to the problems we see, which are primarily due to concentration of exporting capacity."
"We'd love to see any issues that are costing growers money solved and more money in our pockets but there would have to be pretty compelling evidence that a co-op would be the move that really delivered better returns."
Terry Fishpool, Tottenham, central NSW, however, supported Mr Hoskinson's calls.
"On the east coast we feel like our prices have not reflected what is happening on the world market," Mr Fishpool said.
"The trade puts it down to supply chain issues but we feel there is something more systemic there and that growers are not getting the full value for the grain they are producing, especially in these years of high production volume."
Mr Hoskinson said work had been undertaken with CBH prior to the 2018-19 drought years.
"We were in close discussions with them and there were a lot keen, especially in northern NSW around Moree, but the drought put all that on hold, it's time to look back into it again now."
He said legalities meant it was unlikely a formal alliance with CBH could be struck if a co-operative did get off the ground but said he would look to advice from WA about how a grower co-op should be set up.
Meanwhile, grain markets analyst Andrew Whitelaw, Thomas Elder Markets, said he expected interest in pools to rise as grain prices declined.
"Pools have been a dirty word for some years with the cash price so high but now it is declining growers are looking at options that may have hedged some of the upside earlier in the year or can participate in the market later on if they believe it will rise," Mr Whitelaw said.
Gregor Heard
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.
