CBH says quality program means more money for growers

by World Grain Staff
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WEST PERTH, AUSTRALIA — Wheat growers in Western Australia are estimated to have received average additional value of at least A$4 per tonne in their pockets this harvest following the roll-out of Quality Optimisation by CBH Group, the company said on Feb. 28.

CBH Group Chief Executive Officer Andrew Crane told members at the co-operative’s Annual General Meeting in Perth that nearly 2,700 growers had taken up Quality Optimisation with 4.6 million tonnes of wheat going through the post-delivery online optimization process by the January cut-off dates.

Of that, almost 2 million tonnes were able to shift grade.

Crane said it had been a very promising start for one of the most significant developments for grain growers in recent years.

“The Quality Optimisation system was rolled out across all zones in 2011-12 providing growers with the ability to maximize the value of their wheat without having to blend on-farm,” he said. “We believe the conservative benefit of Quality Optimisation this season from grade uplifts equates to at least A$4 per tonne across the wheat crop.

“It is only the first year of Quality Optimisation and we need to continue to monitor its overall impact as the marketing year progresses. However, ultimately it will be up to growers to decide on the value of Quality Optimisation, and where we take it from here.”

Crane said another remarkable achievement this harvest had been the delivery by growers of a record 15 million tonnes of grain into CBH’s storage and handling network, more than double the previous season’s drought-affected receivals of just 6.5 million tonnes.

Crane said the record volume in the network from the recent harvest was expected to see a significant turnaround in CBH’s financial performance this financial year, although the marketing business continued to be challenged by a very competitive trading environment which was pressuring margins for all marketers.

“While it is too early in the financial year to make a firm forecast, at this point we estimate a profit of close to A$100 million dollars,” Crane said. “The key difference between CBH and all other major players in the grain industry is that any surplus that we make is returned, one way or another, entirely to our growers.”

CBH Group Chief Financial Officer David Moroney told members the cooperative had recently secured total banking facilities of $1.9 billion to fund the huge 2011-12 harvest.

“This is the largest facility we have put in place in our history, and have received tremendous support from our banks in designing new facility structures which are more efficient and available at lower margins,” Moroney said.



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