MELBOURNE, AUSTRALIA – After two years of postponements of industry functions related to COVID, the Australian grain industry finally came together in late July in Melbourne for AGIC 2022. At the conference everything was discussed, from geopolitical tensions over global food security to plant breeding technology, adapting to future megatrends and the use of digital technology.
The theme for the 2022 conference was “Growing with Grain”, which Grain Trade Australia (GTA) Chairman Andrew Goyder said was needed after the disruptions of recent years.
“It’s important to come together as an industry and its people as the impact of the past few years has impacted the grain industry and its communities,” Goyder said. World cereals. “The theme of the Growing with Grain conference may seem strange after two years of massive production in Australia. However, it is appropriate given that we are looking at a global food security issue primarily due to the conflict in Ukraine and the limited export supply for traditional Black Sea grain customers.
Murray Watt, the newly elected Federal Agriculture Minister, opened the conference by noting that the new Federal Labor government is strongly agriculture-focused, with an emphasis on the grain sector. He underscored the need to address strategic supply chain opportunities to continue to grow and grow what is a world-leading grain sector. He stressed the importance of international cooperation and the continued need to ensure that trade between countries can continue unhindered and based on market principles.
On the second day, grain industry leaders discussed key challenges including supply chain bottlenecks, labor shortages and its resilience to face and win the challenges of two large consecutive harvests.
Participated in the forum: Ben Macnamara, CBH Group; Phil Hughes, Viterra; and Tony Geitz, Louis Dreyfus Co.
Labor shortages have been widely attributed to COVID-19 and the restrictions the pandemic has placed on movement across national and international borders, but the problem can be traced further back, Hughes said.
Before COVID, Viterra had a wide range of backpackers and ‘grey nomads’ (retired traveling Australians), but Hughes pointed out that while the pandemic had made recruitment difficult, it had only exacerbated skills shortage.
“Over the past 20 years, agricultural colleges have closed so we don’t get the flow of graduates into the industry,” Hughes said. “We need to work with the government to solve the problem.”
Hughes said the industry needed to sell itself and focus on skills and training to deal with labor shortages.
“I was delighted to hear that the new Prime Minister recently announced a skills and jobs summit for the end of the year,” Hughes said. “I hope agriculture and rural industries will be included.”
Macnamara, the new CEO of Australian bulk carrier CBH, said the company was also struggling to fill casual harvesting positions, but overcame this last season by targeting young people.
“Last year we needed 2,000 occasional harvesters,” he said. “We did some publicity and saw a lot of interest from the younger generation.”
Macnamara said agriculture appeals to young people because they see it as more sustainable than other industries. He said CBH competed with the resource sector for truck and train drivers who started out in the grain but then moved on.
“The majority of CBH workers live in the regions, but we are seeing more of a drive-in, drive-out culture in Western Australia,” Macnamara said.
He added that part of the solution is to invest in schools and hospitals to create the necessary infrastructure communities.
Macnamara also reported CBH’s goal to increase capacity at its ports from 1.6 million tonnes per day, which it currently exports, to 3 million tonnes by 2033, and reduce bottlenecks. supply chain throttling to increase productivity.
“Since 2018, we have been working with the state government to understand all supply chain bottlenecks, both rail and road,” Macnamara said.
CBH welcomed the recent announcement of $200 million in joint funding from federal and state governments to make rail improvements and ease the supply chain.
While talking about Western Australia’s supply chain, Macnamara was asked about the state’s record harvest and the impact on CBH of moving grain through the system for export.
“Previously, CBH’s peak shipment was 15 million tonnes in any given year,” he said. “Obviously when you get 21.3 million, it doesn’t go into 15 million. We offer a capacity of approximately 17 million tonnes. This year was the first time the crop size exceeded capacity. It comes down to unstressing the supply chain, so rail is a really important piece. About 60% of the tons that we transport to the port go by rail.
“We need more rolling stock, more drivers and you need to remove the bottlenecks. The Albany area is a very good example. We operate two trains but there are no overtaking loops so removing constraints means putting in passing sidings so we can run extra rolling stock over there and move more tonnes towards the port.
He said CBH expects, even with the peaks and troughs that come with annual grain production, that by 2033 the average total harvest will be 22 million tons with a peak of 30 million. tons. Macnamara said the increase in production will be due to improvements in technology and agronomy as growers adopt new practices.
Macnamara said the supply chain needed to be agile and resilient to meet the challenge of supply chain shocks such as drought, floods and bushfires.
“We have identified where we are weak in the supply chain,” he said. “So of all the processes and systems, if you don’t have people to run them, you run into problems. In Western Australia we had very few marine pilots. Many of them lived in Noosa so they came and went. If a pilot was struck by COVID, our entire system would shut down.
“In a control room run by a train operator, there are only four people running a train. The whole system and network would shut down.
Asked about opportunities in the industry, Macnamara said challenges are opportunities.
“If we think about agriculture, we’ve probably never been in a better position right now,” Macnamara said. “The challenges we face are large harvests and insufficient capacity to move grain, so the opportunity for us is to meet these challenges. Work with the government to inject more capital into our supply chain so we can get more tonnes to our ports.
He said technology was another opportunity, telling the forum that information technology and making the right data available to decision makers was something that CBH had started to address.
Hughes said the industry faced the challenge of decarbonizing the supply chain, which he said would require significant investment given the global reliance on fossil fuels to power ships, trucks and trains.
“The investment required in this regard is incredible – at a level we’ve never seen, really, and which will take several decades,” Hughes said.
Looking for opportunities, Hughes said Australia was well placed to meet the growing demand for food in its neighboring regions.
“Opportunities for Australian exporters exist in South Asia, including the subcontinent and Africa,” Hughes said. “The population of Africa by 2030 will be 1.7 billion people. Incredible opportunities. Africa is already a major grain importer.
The conference closed with a panel discussion on price discovery with Andrew Weidemann, Grain Producers Australia, and David Johnson, Emerald Grain.
Weidemann and Johnson spoke about the outlook for producers and grain traders, with Weidemann noting that there will always be tension with producers over price discovery.
Weidemann said many East Coast growers build on-farm storage, especially when they can harvest faster than they can be received at a bulk handling facility.
Johnson questioned whether using the CBOT as a pricing tool was still relevant for Australian producers given that it represents only a small portion of global wheat trade.
“Forty years ago, CBOT accounted for 42% of global wheat trade,” he said. “Twenty years ago it was 23%, today it’s 10%. Is this still an appropriate price marker when most wheat comes from Russia and Ukraine? »
Weidemann said the industry needs to take a serious look at price transparency, calling for either self-regulation or asking the government to intervene.
“We want to make the cake bigger together, but if someone gets greedy, it becomes a problem,” he said.