Grain supply chain reducing export competitiveness


New report warns Canadian grain growers are gaining a foothold in key Asian export markets

Grain supply chain reducing export competitiveness
Australia's grain supply chain is under pressure from Canadian exporters

 

Australia’s biggest agricultural export has an emerging rival for some of its most lucrative markets, a new research report has found. And it is the domestic supply chain here that is letting the side down.

The Australian Export Grains Innovation Centre (AEGIC) has compared the different farm-to-market systems of both Australian exporters and those of Canada.

The resultant report, titled The Puck Stops Here – Canada Challenges Australia’s Grain Supply Chains,  shows Canada is able to move grain to markets in Asia for about the same cost as Australian farmers, despite greater distances both in-country and on ship.

"As international requirements for grain shifts, and climatic and financial pressures increase, understanding the operating environment of our competitors is vital," AEGIC CEO David Fienberg says.

"Canada in particular is becoming increasingly more competitive, challenging Australia’s key Asian export grain markets."

One key difference is Canada’s ability to offer just-in-time deliveries from the farm. In Canada, higher volumes of grain are stored on-farm for longer. In Australia, the majority of grain is moved from farm to warehouse immediately after harvest.

Canada also boasts more receiving sites, and highly efficient rail lines to take grain to ports on the west coast.

"The majority of Canadian grain is now delivered through this infrastructure which has reduced the time taken to deliver grain to port by one third," Fienberg says.

"Canadian supply chains still operate at a higher cost than Australian supply chains, but with higher yields."

The report makes recommendations on how Australian can enhance its competitive position. It advises both federal and state governments to ensure investments in road and rail infrastructure "support least-cost grain paths", and also advocates a smaller number of better equipped receiving points in grain growing areas.

The report further lobbies for increased research – supported by both industry and government – that will assist grain industries in adapting to the changing climate.

"The ultimate aim is to enhance the international competitiveness and value of Australia’s export grain and to return pre-farm gate value to grain growers," Fienberg says.

 

You can also follow our updates by joining our LinkedIn group or liking us on Facebook