CBH introduces grower contract limits to make grain trading ‘more equitable’ as demand to sell grain surges

Farmers selling more than 40 tonnes of grain to CBH Group will be limited to trading every three business days in a nationwide-first hoped to make accessing highly-competitive contracts “more equitable”. Under the new rules — which came into place on November 28 — growers who access a CBH contract of 40 tonnes or more will be required to wait two business days before being able to contract again. The move comes as farmers scramble to access CBH contracts to sell WA’s mammoth harvest, with the latest industry projections at 23.9Mt — just shy of last year’s record 24.3Mt harvest. CBH is one of a record 18 grain traders set to export from the cooperative’s four ports in 2022-23, with demand for CBH contracts surging this year — leaving many growers missing out. The cooperative’s prices have been sitting about $20 to $30 above what other traders have been offering for grain, creating what some farmers have labelled a “selling frenzy” as they try to access CBH contracts. CBH chief marketing and trading officer Jason Craig announced the change last week, saying it would make trading “more equitable” and allow more growers to access CBH contracts. In a video posted to CBH’s social media, Mr Craig acknowledged it had been a “challenging year” for farmers trying to access CBH contracts but said the cooperative could not “buy the entire crop”. “It is important to say CBH marketing and trading has been keeping prices closer or near to reflecting international values, and as a result, demand for contracting has been significant,” he said. “(The changes will) assist growers to ensure everyone can get a contract. “The reason for the introduction of this, is to ensure we can get a greater spread across all of our members and allow every member access to grower contracts.” Mr Craig told growers it was difficult for CBH marketing and trading to provide all growers with a contract and to “buy the entire crop”. “By assisting other growers, once you have received a contract and allowing two business days before accessing another one, once you have should see an improved spread across WA growers,” he said. “We thank you for your patience during these very challenging times and we look forward to working through you as we will be there contracting with WA growers through harvest and beyond.” Speaking to media last week, Mr Craig said the move was not a “silver bullet” because demand for contracts was “exceeding supply”, and some farmers would “continue to be disappointed”. “The distribution across growers will be greater as a result of this,” he said. Despite major rain and hail events across the State in the past six weeks, a record-breaking harvest for WA growers remains a possibility after a “near-perfect” season and soft finish. While WA’s November forecast sits at 23.967Mt, experts believe the bin-bursting crop has the potential to surpass last harvest’s 24.3Mt by a “fair margin” if the mild finish and consequently slow start to harvest continues. It comes as Grain Industry Association of Western Australia’s latest report revised figures for WA’s 2022-23 harvest, adding another 800,000 tonnes to its October forecast of 23.147Mt. That total is set to be made up of 12.6Mt of wheat, 6.15Mt of barley, 3.98Mt of canola, 600,000 tonnes of lupins, 565,000 tonnes of oats and 72,000 tonnes of pulses.