In response to growers needs to have clear price signals of the cost of receiving and moving wheat to port from every receival silo, AWB Manager for NSW and Queensland, Mr Peter Burke, announced today that an estimated silo return for every storage facility approved for the delivery of wheat would be published on AWB’s website under the Growers Club.
The estimated silo return (ESR) is the gross pool return for a particular grade of wheat minus the estimated supply chain costs attributed to delivering that grade of wheat to a particular export position, i.e. port.
In making the announcement, Mr Burke, said that the AWB initiative is not just providing clearer price signals to growers but giving growers more detail on storage and handling options.
“AWB will publish on its website an ESR for each site across Northern NSW and Queensland from today, as well as publishing the supply chain costs or site to sea costs used to calculate silo returns,” said Mr Burke.
The publication of estimated silo returns and site to sea costs is available in Queensland and Northern New South Wales from today, and will be on-line in Southern NSW, Victoria, South Australia and Western Australia by the end of September.
“Growers will be able to access estimates on all three elements that comprise site to sea costs - including up country storage costs, freight costs from storage to port, and port costs including bulk handling companies port costs,” said Mr Burke.
“This information will provide accurate and regularly updated estimates of supply chain costs to growers and the domestic trading companies.
“Growers should be aware when making delivery decisions the most critical figure is the overall site-to-sea cost rather than the individual components.
“This is critical as decisions based purely on differences between a single component such as silo freight rates can be misleading. As a result of AWB choosing the least cost path from silo to port a decision may be taken to pay additional freight costs to move grain to a cheaper port option when this produces an overall cost benefit to growers. The combined effect will be the lowest cost pathway from site to sea,” said Mr Burke.
Growers should also be aware that the freight and port components can each be a weighted average figure. This is because in some areas a number of sites have multiple choices in terms of port destination and even which transport company we might use to transport from site to port.
“AWB is committed to choosing the least cost path for wheat delivered to the National Pool,” said Mr Burke.
“In addition, AWB will publish regular updates of site to sea cost estimates against estimated pool returns. This will occur in line with the National Pool updates.
“The ESR information published on the AWB website will reflect current price changes at site and as such will also assist the competitive arrangements amongst storage service providers,” said Mr Burke.
All information can be accessed from the AWB Home Page under the Growers Club at www.awb.com.au.
Growers wishing to join the AWB Growers Club or find out more details should contact their local regional office or call AWB Service Centre on 1800 054 433.