The power of pools
Having notched up a recent record-breaking result and with proven performance over time, pools offer a great alternative grain marketing strategy for this season’s harvest. Newly appointed Chief Marketing & Trading Officer at CBH, Paul Smith, explains why.
The latest results are in. The sustained strong performance of CBH pools continues to deliver value for WA grower participants.
Pools provide an easy and reliable alternative to diversify your grain marketing. When used consistently, pools are proven performers that stand the test of time.
The recently finalised CBH pool – the 2022/23 Wheat Harvest Pool – was a record. Returns of $486.78 for APW1 Kwinana and $451.66 for ASW1 Kwinana were generated. The pool outperformed the average cash price by $68 to $95 per tonne and the average harvest price by $25 to over $100 per tonne, depending on the grade and zone.
According to Paul, these results were in line with the consistent performance of CBH harvest pools over time, when compared to the best available cash prices.
“For the completed 2021/22 season, an additional total of $198 million in grower value was achieved, over and above the average price growers sold their grain to CBH for cash,” Paul said.
“Any value the pool can achieve is captured within the pool and goes directly back to growers via pool equity. This works for us as a cooperative, as part of our value proposition and purpose.”
Values are for up to five seasons of finalised pools. These values reflect the average out-performance of the pool compared to the average of the best available cash prices over the pool lifecycle.
Maximising value
While every season is different, Paul said there were various levers CBH could exercise within the pool to maximise value for participants.
“As the grain merchant, CBH manages all supply chain activities to facilitate the physical movement of grain from the CBH system to the end-user destination,” he said.
“When you sell into a pool, you have access to the entire length of the supply chain, which presents multiple opportunities to derive value along the supply chain.”
For example, the pool takes advantage of the size and scale of CBH’s position as the largest exporter out of WA, providing flexibility to seize opportunities as they arise, while minimising any supply-chain impacts.
Pools tap into premium markets worldwide, maximising potential value for the grower.
“We access and leverage our longstanding customer relationships to extract optimal value out of your grain,” Paul said.
“Pools also participate in post-harvest marketing windows, which enable value to be captured when grain origins globally are at key points in their production cycles.”
New this season
This season’s CBH harvest pool has opened for both Guaranteed Access Contracts and direct nominations. There is completely open access for all WA growers – you do not need to be a past user to sell into a pool.
Guaranteed Access Contracts feature multigrade options this season. These include specific contracts for noodle wheat, GM and non-GM canola, feed barley and malting barley.
“This change allows for improved risk management and decision making within the pool,” Paul said.
When it comes to payment, there is flexibility to choose what suits you. There are five payment methods to fit the needs of your farm business. You can view anticipated pool payments online with CBH’s pool calculator.
The pools’ process is quick and simple via CBH LoadNet or by calling the Grower Service Centre on 1800 199 083.