DISAPPOINTING grain prices and the promise of bumper crops has farmers scrambling to increase their on-farm storage to store grain to sell when the market improves.
Exhibitors at this year’s AgQuip field days reported strong demand and sales for silos, with many businesses saying they were booked up until early next year.
New crop APW wheat is currently fetching between $225 a tonne and $230/t delivered to Newcastle and barley from 190/t to $195/t, with both grains fetching between $40 and $70 less than at this time last year.
Widespread rain in May was the start of a big push for on-farm storage from He Silos Gunnedah.
“Traditionally AgQuip is where customers get the prices, go home and have a think about it, then order a few weeks later, but this year they were making orders on the spot,” assistant manager Andrew Seach said.
“A lot of our regular customers at Rowena, Cryon, Walgett, Moree and Mungindi are harvesting their first crops for a few years so they’re starting to come back.
“A lot of farmers are also preparing for next year as well because there’s still a lot of water lying around.”
Demand for on-farm storage increases each year as tax incentives, marketing opportunities and convenience make the investment worthwhile, according to AgVantage Commodities director Steve Dalton, Narrabri.
“There are many reasons why growers invest in on-farm storage and grain prices is part of it, but there’s also the harvest flexibility, blending opportunities that allow the grower to capitalise on higher protein wheat rather than the bulk handler, and the flexibility over how the grower markets their grain depending on whether there's a strong domestic or export market,” Mr Dalton said.
“Growers can access premiums for high protein wheat by sending to the packer rather than the bulk handling system.
“We’re also seeing bulk handlers make business decisions where they're closing some the smaller, less efficient sites, and pushing incentives for growers to deliver to the larger main terminals.”
Mr Dalton said more growers were starting to blend their grain.
“The best grain growers are investing in equipment that tests grain for moisture, protein and screenings, so from there they're able to segregate grain, blend it and sell it according to the markets that suit them.”
