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CBH Group lifts controversial 200 tonne grain selling limit put in place to avoid buying ‘the entire crop’

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Cally DupeCountryman
A CBH grain ship at Kwinana Grain Terminal.
Camera IconA CBH grain ship at Kwinana Grain Terminal. Credit: Supplied by CBH/TheWest

CBH Group has lifted a controversial limit on grain selling it put in place six months ago as a way to avoid ending up with more grain than it could ship after a second record WA grain crop in a row.

The move, which CBH labelled part of its “dynamic pricing strategy”, limited growers to selling a maximum 200 tonnes of grain to the company at a time when it was introduced in October last year.

It led to 20 per cent more growers being able to contract with CBH Group in the months that followed, but frustrated farmers who wanted to sell the bulk of their grain to the co-operative.

During harvest, CBH further tightened its contract limits so that growers selling more than 40 tonnes of grain to CBH were limited to waiting two business days between transactions. That restriction was lifted on May 8.

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At the time of announcing the 40t limit, CBH marketing and trading officer Jason Craig said the strategy would make trading “more equitable” and allow more farmers to access CBH contracts.

In a video posted to CBH’s social media in November, Mr Craig said the co-operative could not “buy the entire crop”.

He this week told Countryman the move had come after consecutive record harvests when “grain supply outstripped capacity of the grain supply chain”.

“These restrictions were put in place to allow growers fair access to our dynamic pricing, which was implemented to close the gap between WA grain prices and international values,” Mr Craig said.

“Since then, we have been closely monitoring the strong performance of the supply chain, market conditions and the production outlook for this season’s WA crop.

“Over the coming months, we will continue to closely monitor market and seasonal conditions.

“We may reinstate restrictions, if appropriate.”

CBH has also removed limits on cash contracts, as well as staggered pricing across zones also introduced in 2022, in a bid to “give everyone access to pricing at the same time”.

Under the 40t restriction — put in place on November 28 — growers who accessed a CBH contract of 40 tonnes or more were required to wait two business days before being able to contract again.

The move compounded the number of farmers scrambling to access CBH contracts — which were often offering prices $20 to $30 higher than its 17 fellow grain-trading competitors active in WA.

Many were frustrated they were unable to access CBH contracts, with some waking in the middle of the night to try their luck at selling to CBH and others travelling to Perth for better internet.

WA’s grains supply chain was thrown into the spotlight after a record harvest of 24.7Mt in 2021-22, compounded by a second record harvest of 26Mt in 2022-23.

A statement posted to the CBH Facebook page last week said its prices would be released on its LoadNet site “throughout the morning of each business day”.

“We understand these restrictions have caused frustrations for our growers, and we really appreciate your patience,” the post said.

Farmers with questions should contact CBH’s Grower Service Centre on 1800 199 083.

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