Thumbs up for CBH fertiliser

Nyabing farmer Braden Johnston has collected 85 tonnes of CBH-K (a phosphate and potash blend) fertiliser from CBH’s Kwinana facility, and is happy with the quality.

He decided to buy a portion of his fertiliser requirements from CBH, in two batches, alongside a further 235 tonnes of granular fertiliser from CSBP which will be used across the 3000ha crop he plans for the 2016 season.

Mr Johnston, who farms with wife Kate, said he was impressed by the CBH Kwinana facility. In particular the blending systems looked highly efficient and accurate.

He said CBH’s prices were competitive with other suppliers in the market.

Mr Johnston said he was keen to get in early with CBH and lock in his purchases. However, he benefited from splitting his purchase because the second batch, collected two weeks ago, was about $90 tonne cheaper than his first purchase in December 2015 because of the slump in the global fertiliser price.

Mr Johnston said he welcomed CBH’s move into the fertiliser market and was happy to support the co-op.

“A bit of competition will mean the other fertiliser providers will have to sharpen their pencils,” he said.

“I also welcome the fact any profits will be returned to growers in the form of rebates.”

Mr Johnston hopes CBH will also move into supplying liquid and compound fertilisers.

CBH fertiliser business manager David Pritchard said the new business had fared well from strong grower support.

He was confident most of the 30,000 tonnes of phosphates that had arrived late in 2015 would be contracted before the start of the 2016 season. A similar amount of urea is scheduled to arrive in WA in April.

“We have been selling in earnest since September/October last year; we have had some good sales,” Mr Pritchard said.

However the slump in global fertiliser prices since contracting its own purchases late in 2015, and the need to reflect these in domestic pricing, meant it had been a tough start for the business.

Global fertiliser prices have been in freefall since mid-2015 due to excess phosphate supplies from China and nitrogen supplies from South-East Asia and the Middle East, coupled with falling demand from key importers such as Brazil.

“It’s been a tough market to come into given the global fall in prices — which are being passed on to the grower,” Mr Pritchard said.

“CBH is here for the long haul in the fertiliser market, it's not about testing the waters for one year and going away if we don't like it. CBH is taking a long-term view on this. We’ve also taken a very conservative approach to our market entry with the smaller cargo purchases and low capital expenditure start-up costs.”

Despite market conditions, Mr Pritchard said the business was in good shape and the focus would be on ensuring value was returned to growers and that the grower experience at the site was efficient and fast.

The Kwinana facility has a 25,000-tonne capacity and the Geraldton facility has a 15,000-tonne capacity. Both sites have the latest technology Yargus 250-tonne-per-hour blending equipment which was sourced from the United States.

“Our blending equipment is highly efficient and accurate and the out-turn experience has been noted by many contractors as the fastest they have had anywhere,” Mr Pritchard said.

Despite the keenness from growers, Mr Pritchard said there was no immediate plan to expand into the supply of liquid and compound fertilisers.

“However we are certainly aware that to grow our business we will have to look at product range. So we are looking at it but need to ensure it is the right value proposition first,” he said.