WEST PERTH, AUSTRALIA — CBH Grain has released its nominated estimated pool returns (NEPRs) for the 2010-11 harvest in Western Australia. The NEPRs are the rates on which CBH Grain bases its advance payments and harvest loans.
CBH Grain General Manager Brian Mumme said that releasing the NEPRs and advance payment percentages gave growers certainty over cash flow and returns as many headed into a tough harvest.
"In a difficult season, growers will be looking for stability and security from their marketer," Mumme said. "To assist with cashflow in what is obviously a time of hardship, CBH Grain has made every effort to make the advances as competitive as possible.
"This has been a challenge with the international market at 15-month highs but we have achieved a suitable balance between maximizing grower cash flow at harvest and not exposing pool participants to undue levels of risk."
The advance payments for wheat, canola and barley have all increased 5 percentage points this year to 75%, 75% and 70% of the NEPRs respectively. Lupins have increased 10 percentage points to 75%.
Mumme said CBH Grain was also continuing its longstanding practice of posting realistic estimates of what it expected the pool return to be. He said it was important growers compare the track record of marketers to see if their pool return estimates at harvest were consistent with the final performance of the pool.
"Our NEPRs are a genuine and accurate reflection of where we see the market," Mumme said. "While the actual return can not be finalized until the pool's sales program is complete, a considerable amount of work goes into making sure we provide growers with an estimate that we genuinely believe we can deliver, if all things remain equal."
Growers should also take into account that CBH Grain has not offered an early contract bonus this year because it would have been irresponsible in current market circumstances to have offered a bonus which had the potential to damage pool returns for all growers.
"It is our view that prices will remain strong into harvest, meaning any potential losses from early hedges could be significantly amplified if pool tonnages come in lower than expected at harvest time," Mumme said.
Growers who market their grain through CBH Grain will also benefit from the fastest payment terms available this season in Western Australia, with payments now delivered within seven business days after nomination.
The pools opened for delivery on Oct. 1. Growers can also book guaranteed access contracts to secure themselves a place in the pool before delivery as pools can close without notice and at any time.