A farming family in Western Australia’s Great Southern region has parted ways with the state’s largest grain handler, Cooperative Bulk Handling (CBH), to start a rival grain export enterprise.
Commodity Ag, a logistics and supply chain company owned by the Richardson family, who farm about 370 km southeast of Perth in Gnowangerup, successfully exported its first grain shipment this week.
More than 20,000 tonnes of wheat grain from the family’s farming operation were loaded onto a 40,000-tonne bulk carrier at the port of Albany. The ship, headed for the Indonesian port of Surabaya, marks the first instance of an independent farming operation directly competing with CBH in grain handling and export.
Room for Small Players
Commodity Ag’s supply chain development manager, Casey Naisbitt, explained that the decision to ship their own grain, rather than continue with CBH, was driven by cost considerations.
“CBH has been integral to every farmer in WA, but we believe there’s room for smaller players like us to operate in areas where CBH might not be interested,” Naisbitt said. “All our grain is grown and stored on farms, making it more cost-effective for us to manage the process.”
Grain exports from Western Australia are valued at approximately $5.9 billion annually, ranking as the state’s fifth-largest export industry, following iron ore, petroleum and gas, gold, and lithium.
Expansion Plans
Naisbitt noted that while the first shipment consisted solely of grain from the family’s farms, Commodity Ag is open to onboarding new customers.
“This venture was an opportunity we saw for Albany, and we decided to give it a try and see how it goes,” he said. “We’re here to serve ourselves but also to offer services to other operators interested in bespoke markets.”
Initially starting with wheat grain, Commodity Ag is already exploring opportunities to provide market access for other niche products. “We’ve had discussions about pulse grains, lentils, fava beans, and similar products,” Naisbitt added.
Industry Reaction
The move has not taken industry insiders by surprise. Former CBH chairman Neil Wandell, who has been exporting pulses from the port of Esperance for the past seven years, stated that more farmers would likely bypass CBH to reduce costs.
“CBH’s price increases, tied to the CPI, can quickly become a burden. We can now ship grains directly from farms more cheaply, offering a significant advantage in controlling the supply chain from farm gate to port,” Wandell said. “It’s inevitable that CBH will face competition. They’ll have to decide whether to work with it, support it, or fight it.”
Future Challenges for CBH
With CBH planning to invest billions in statewide infrastructure upgrades over the next decade, Wandell suggested the organization will need to adapt to retain its members.
“They’ve invested heavily and seen good returns, but their model might need to change moving forward,” he said. “I don’t think they’ll lose many tonnages, but there are niche areas they don’t serve well.”
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