The largest expenditure item for most Western Australian grain growers is not chemical, not fertiliser – it is export supply chain costs.
The cost of export logistics will be discussed at several Regional Crop Updates, hosted by the Department of Agriculture and Food and local grower groups, with support from the Grains Research and Development Corporation.
A report by the Australian Export Grains Innovation Centre (AEGIC) found that storage, handling, freight and port costs, as well as levies and royalties starts at around $60 per tonne for a Western Australian grower, 200 kilometres from port.
This is equivalent to about $120 per hectare in an average season or 25-30 per cent of growers’ cost of production.
Department senior economist Tamara Stretch, one of the authors of the report, said it might come as a surprise that export supply chain costs were the largest expenditure for most growers.
“Port fees comprise about one third of all supply chain costs, or about $22 per tonne,” Ms Stretch said.
“These fees are often not disclosed to growers, as prices are quoted Free in Store with the port fees already deducted. If the cost components of the supply chain were reported regularly it would allow farmers to monitor those costs.”
The AEGIC report also found that while WA has a shipping freight advantage into South East Asia, the State does not have a significant advantage into North Asia.
“Due to our close proximity to markets like Indonesia, Malaysia, Thailand and Vietnam, our sea transit times are 25-50 per cent shorter than the US, Canada and the Ukraine,” Ms Stretch said.
“However, WA has a very limited freight advantage over the US and Canada into North Asian countries, such as China, Japan and South Korea, where the bulk freight cost difference is only US$1-2 per tonne.”
The report will be discussed at Regional Crop Updates in March, including Wickepin, Ravensthorpe, Kendenup, Dalwallinu and Salmon Gums. The AEGIC report’s authors will be speaking at these events.
A copy of the report is available from www.aegic.org.au For a schedule of events and to register visit DAFWA’s website agric.wa.gov.au and search for ‘regional crop updates’ or call a local department office.
Media contact: Megan Broad/Jodie Thomson, media liaison +61 (0)8 9368 3937