CBH Marketing and Trading grower payments hit $2B
The milestones keep coming this January with CBH Marketing & Trading hitting the $2 billion mark in total payments to growers during the first week of the New Year.
The latest milestone comes just a month after CBH M&T passed the $1 billion in total payments to growers.
Jason Craig, CBH Chief Marketing and Trading Officer, said increased grain value and significant forward and harvest grain accumulations has contributed to these milestones.
“WA growers have also shown enduring commitment and patience as we have worked through significant challenges this year. These financial milestones represent the long, hard work put in by WA growers and their families and underscore our unwavering co-operative commitment to delivering value for them,” said Jason.
Production trends and market demand
Grower payments also reflect trends in WA grain production. For example, payments for canola have increased year on year given the increase in both value, yield and plantings across Western Australia. Canola receivals into the CBH system have reached 4 million tonnes approximately 1 million tonnes higher than last year, the previous record.
From an international perspective, strong early demand and sales of canola into the EU market provided M&T support to forward contract significant volumes with WA growers in the second quarter of 2022.
Different year, different challenges
Jason said that M&T’s Dynamic Pricing Strategy this season has worked to provide growers significant value through market leading prices but not without challenges.
Through the Strategy - borne out of a combination of reduced M&T shipping capacity, increased trader competition and record, consecutive harvests - M&T has worked to deliver growers grain prices that reflect international market values.
“Through our Dynamic Pricing Strategy, M&T have paid consistently higher prices for grain since the beginning of October 2022, directly influencing the larger payments for grain since growers commenced nominating their grain,” Jason said.
“Additionally, the Strategy has created competitive tension amongst WA grain marketers, increasing prices for all grain sold within WA – again, creating significant value for our grower members.”
While demand for M&T grain purchase contracts has been highly competitive, and often frustrating for growers to access, our volumes to date have been in line with or larger than previous seasons – providing our grower members significant value.
Grain accumulation highlights include 2022 realising M&T’s largest October accumulation on record while the opening day of the Deferred Sales Pool in December coincided with our largest single day of total accumulations ever.
While there have been strong results so far, each year is unique with recognition that it will be very challenging to surpass the record total of $5B M&T paid to growers for the 2021/22 Harvest.