Hectare-based marketing option opens

by Staff
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WEST PERTH, AUSTRALIA — CBH Grain is offering Western Australian wheat and barley growers a hectare-based marketing option again in 2011, CBH said on July 7.

Unlike traditional tonnes-based pool products, the hectare advantage pool allows growers to contract on hectares while providing them with a pre-harvest marketing option.

The hectare advantage pool helps growers reduce the production risk that is associated with contracting early in the season while also providing some price certainty in the lead up to harvest. Added benefits for growers are a diversified marketing portfolio and a price that is managed by experienced pool managers.

The hectare advantage pool is the result of CBH Grain listening to growers’ feedback. It was offered as a trial to growers during 2010-11 after growers indicated they would like the option to commit to CBH Grain during the early stages of the growing season.

The trial identified that growers appreciated having a hectare-based option to diversify their marketing plans and mitigate some of their risk heading into harvest.

CBH Grain Accumulations Manager Richard Simonaitis said the CBH Grain hectare advantage pool has been designed to provide growers with the right level of balance between production and price risk while providing price protection throughout the growing season.

“The hectare advantage pool is designed for those wheat and barley growers who want to focus on producing their crop without needing to watch the markets every day,” Simonaitis said.

“The objective is to assist growers in managing their production risk through a structured hedge profile that provides increasing price protection as yields become more certain.

“The hectare advantage pool suits those wanting flexibility and the advantage of not having to worry as much about the variability in their production. This product allows growers to deliver what they grow without the stringent tolerances around tonnes.”

Available for wheat and barley, the minimum contract size for the pool is 50 hectares. Contracting is open until July 31.
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