COMPETITION among exporters for east coast grain is on the rise and eastern Australia's 10,000 growers could be winners in a new look grain supply chain.
Much-needed money has flowed into new and upgraded up-country infrastructure in the north and south of the State and more is set to come.
"The deregulated grain market has allowed new players to enter the market and we are now seeing increased investment in infrastructure," said Grain Trade Australia chief executive, Geoff Honey.
Exporters are honing their pitch to growers, eager to secure long term security of supply for both domestic and international markets.
Companies like Emerald Grain and Cargill have followed in GrainCorp's footsteps and are buying infrastructure to piece together an integrated supply chain that can shift grain from paddock to port.
Emerald has been the most active new entrant in east coast up country infrastructure, upgrading its facilities in an effort to lure more throughput.
It will spend $3 million each on its Ardlethan, and Elmore, Victoria, receival sites.
The company is boosting the rail load out capacity at Ardlethan, upgrading bunkers and stackers while Elmore's throughput was boosted, with an upgraded weighbridge and additional drive over stackers.
Mr Honey said the emergence of new integrated supply chains should be viewed as move away from monopoly control.
"There are more people who are willing to put money into up-country infrastructure, but also more capacity and investment into the port facilities," he said.
"The market is really being decentralised."
In the increasingly cut-throat east coast market, exporters will need to lower freight costs to capture supply and shore-up their throughput.
The players who have brought new competition are forking out more money on infrastructure and will need supply for their markets.
"It is a real positive for the production sector. Increased competition can only be good," Mr Honey said.
GrainCorp is still the dominant force on the eastern seaboard, with 180 receival sites and the lion's share of the harvest.
Increasing on-farm storage and the recent proliferation of up-country container packing facilities following the demise of the single desk wheat export policy in 2008 have been driving factors behind GrainCorp committing $200m for a revamp of its upcountry network, dubbed Project Regeneration ("GrainCorp's dollar gain and lost site pain", The Land, June 12, p8).
The dominant east coast player is targeting a reduction of $5 a tonne across freight and storage costs and a shift of an additional one million tonnes of grain to rail.
GrainCorp corporate affairs spokesman Angus Trigg said the new strategy would help boost farmgate returns by pushing grain from up-country down the most efficient pathways to port.
"Project Regeneration is about getting the link between rail and our network working as efficiently as possible," he said.
"Any inefficiency between up country infrastructure and the port decreases the amount that can be passed back to growers, reducing farm gate returns.
"For example, any time there is an under-loaded train or a delay caused by breaking up and shunting trains, that all impacts the price the market is prepared to offer growers."
Targeted investment for a smaller range of bigger sites would result in more efficient, and ultimately more profitable, bulk handling equipment, he said.
However, Mr Trigg was reluctant to describe GrainCorp's revamped supply chain network in the popular vernacular as a "hub and spoke" system.
Project Regeneration would see investment in key export focused up country sites, supported by smaller domestic focused sites, combining to provide a network service to export and domestic.
"Yes we are investing in the primary export sites, but the way the system is designed, and particularly the introduction of Export Direct for export customers means the supporting silos will share the benefits of the investment in export-focused sites," Mr Trigg said.
"Export Direct removes significant complexity by giving GrainCorp responsibility for export execution.
"Previously, exporters have been responsible for getting their grain to port which means it can come from anywhere and can be quite a complex process.
"If we take on this responsibility, it means growers can continue delivering into any site and buyers can buy out of any site; but we can act through logical swaps to ensure that export orders are served by the most efficient rail sites and domestic orders are served by the most efficient site for that order.
"Of course, the benefit of improving export efficiency and lifting the export price for grain is that it also sets the pace for the domestic market."