Report: Pool returns not indicator of performance

by World Grain Staff
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MELBOURNE, AUSTRALIA — A report commissioned by Wheat Exports Australia (WEA) into estimated pool returns (EPRs) has found that EPRs are not a good indicator of pool performance, WEA said on Aug. 16.
The report Estimated Pool Returns – The relationship to final price was prepared by PricewaterhouseCoopers (PwC) to examine the relationship between published EPRs and final pool returns (FPRs) for the 2009-10, 2010-11 and the unfinalised 2011-12 pools.
Peter Woods, chief executive officer of WEA, said the report was commissioned following concerns from growers and industry about a lack of correlation between EPRs and FPRs.
“WEA commissioned PwC to assess whether EPRs are an effective price signal in the deregulated export environment,” he said. “The report found there has not been a consistent pattern between FPR’s and EPR’s over the period analyzed and that only some pool operators were able to reflect the West-East differential in their pool returns in 2010-11.
“The analysis also indicates that neither a pool’s EPR nor the operator’s past performances are good indicators of future pool performance. However, it also found there are no better alternative indicators that could be used to compare an operators’ performance.”
He said the report provides an insight into pool pricing. “It gives growers an indication of EPR reliability and it’s correlation with FPRs achieved in the 2009-10 and 2010-11 pools.”
The report also outlines FPRs at a national, state and pool operator level.
Other key findings in the report include:
•      In 2009-10 the average FPR was A$10 per tonne lower than the average EPR during the decision period (Oct.1 to March 1). For 2010-11 the FPR was A$1 per tonne higher than the average decision period EPR.
•      Of the 40 pools analyzed over the two pool periods (2009-10 and 2010-11):
-        75% had a lower FPR than the average decision period EPR, indicating that growers received a lower income than forecast by the published EPRs.
-        43% were estimated to be within A$10 per tonne of the FPR (based on the difference between the FPR and the average EPR during the decision period).
For more information or to arrange an interview contact WEA Public Affairs Officer, Katie Lalor on 0408 009 268.
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