GRAINGROWERS' recent report in which it claims Australian grain growers may be losing billions of dollars in value due to abnormally low local grain prices has sparked the latest wave of industry calls for an inquiry but grower unrest with the trade is nothing new.
The suspicion the grain trade may be taking a disproportionate slice of the pie has been publicly circulating among the grower community at various times since deregulation of the wheat industry in 2008.
Stocks information has been a particular sore point over the years, with calls going back nearly a decade for grain bulk handlers to be compelled to release more data about grain stocks.
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However, the current calls for an inquiry focused more on the grains supply chain go back to 2019 when Grain Producers Australia wrote to then Minister for Agriculture David Littleproud to suggest it was time to have a look at the structure of the grains industry after a decade of deregulation.
These calls intensified over the course of the 2021-22 harvest and the following grain marketing season, where growers constantly called out the fact Australian grain prices were the lowest in the world.
For its part, the peak body for the grain trade, Grain Trade Australia, has steadfastly denied the need for an inquiry.
In an interview with ACM Ags last year GTA chief executive Pat O'Shannassy argued that the task of moving the big 2021-22 harvest meant the supply chain constraints in moving the big crop meant there would be grain that had to be moved in the second half of the marketing year where demand was lower, resulting in lower prices.
He also said that soaring prices in the wake of conflict commencing in Ukraine had created a disconnect between US futures, traditionally used to determine basis, or the difference between Australian and global grain prices, and the physical market.
"At times of extreme volatility a futures market for periods of time are not as relevant to global physical markets and do not fully reflect them," he said.
However, in an excerpt from the confidential GrainGrowers report seen by ACM Ags, data shows that it was not only US futures exchanges, such as Chicago, Kansas and Minneapolis that had strong premiums compared to Australian prices, with Minneapolis close to $A150 a tonne more than Port Kembla prices through 2022.
"The research also shows that the recent current pricing anomaly to international markets cannot be explained away by the effects of COVID-19, supply and demand forces or variations in ocean freight rates," the GrainGrowers report said.
GPA has been particularly forthright in its calls for more transparency within the grain trade.
It has said the current arrangement, even allowing for government mandated provisions such as the Wheat Port Access Code, there was the scope for big grain businesses, such as regional storage and handling enterprises, to misuse their market power and create potentially uncompetitive environments.
Elevation margins for grain exports were one area growers felt there was excessive profit-taking by the exporters.
"The level of market power held by major bulk grain handlers who also sell and market grain - and the influence of this market power over other participants such as second and third-tier bulk handlers, is another issue that's also causing ongoing concern," GPA chairman Barry Large said.
Within the debate people have several key questions such as suitable storage and export capacity, given Australia's variable climate, where national winter crops can exceed 60 million tonnes or sit at just over half of that in drought years.