Good harvests drive high CBH rebate

Farmers who sold grain to CBH last harvest will get an extra $4.20 per tonne under the grower patronage rebate program, which offsets storage and handling fees.

CBH chairman Wally Newman said the rebate was the second-highest ever paid.

“We are proud to announce this rebate as we head into what we expect will be a record harvest,” he said.

“Despite challenging conditions, CBH has worked hard to drive value within the business to support growers through rebates.”

A farmer who delivered the average of 3000 tonnes of grain to CBH would receive $12,600. The rebates are based on the amount of grain delivered and sold to CBH last financial year.

That combined figure then offsets the storage and handling fees of the upcoming season.

“These savings are significant for our growers and come on top of storage and handling charges which are already substantially lower than industry standard,” Mr Newman said.

He said the CBH Group had worked diligently in the past 12 months to reduce the costs associated with running the business through its Driving Business Efficiency program.

To date, this has saved a total of $15 million — more than half of the $25 million total savings target over two years.

“We’ve taken a good hard look at how we can do business smarter and found ways to operate more efficiently and cost-effectively,” Mr Newman said.

“We do this in order to return as much value as possible to our growers, which has led to today’s announcement of such a healthy rebate.”

The CBH Group also announced that it estimated an average 4 per cent reduction in freight rates over the upcoming 2016-17 harvest.

CBH general manager of operations David Capper said the estimated reduction was the result of bigger than average harvests bringing the cost per tonne down.

“We’ve had a number of good harvests and are expecting another this season — this has a positive impact on our fixed rail costs which are based on a five-year average,” Mr Capper said.

“The more tonnes the freight fund handles the more cost effective it is per tonne. We’re pleased to be able to forecast a reflection of this in freight rates for the upcoming season.”

CBH Group is currently negotiating with Brookfield Rail for an interim rail access agreement, with the current agreement set to expire on December 31 while arbitration continues to settle long-term access arrangements.

Mr Capper said that while negotiations were progressing, grower freight rates will be contingent on the outcome.

“We are continuing to negotiate a fair price for rail access to help our growers be competitive in the global market,” he said.

“We are hopeful of a positive outcome, however, we will finalise freight rates early in 2017 when we have a clearer picture of the environment, including Brookfield Rail’s access fees.”

CBH has also worked for cost-effective road transport, aided by a slight reduction in fuel prices since last season’s rates were set in February.